Agencies extend foreclosure moratorium and other Covid-19 flexibilities
On August 27, Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac will extend their moratorium on single-family foreclosures and real estate owned (REO) evictions until at least December 31 (which was set to expire on August 31, previously covered here). The foreclosure moratorium applies to homeowners with an Enterprise-backed, single-family mortgage and the REO eviction moratorium applies to properties that were acquired by the GSEs through foreclosure or deed-in-lieu of foreclosure transactions.
FHA also further extended its foreclosure and eviction moratorium through December 31 (also set to expire on August 31 and previously covered here). The moratorium applies to homeowners with FHA-insured Title II Single Family forward and Home Equity Conversion (reverse) mortgages, excluding legally vacant or abandoned properties (previously discussed here and here). Additional details can be found in Mortgagee Letter 2020-27.
Additionally, on August 26, FHFA announced an extension of a temporary policy that allows Fannie Mae and Freddie Mac (GSEs) to purchase qualified single-family mortgages in forbearance that meet specific eligibility criteria due to the Covid-19 pandemic. The policy is now extended for loans originated through September 30. As previously covered by InfoBytes, in an effort to provide liquidity to ensure continued lending during the Covid-19 pandemic, FHFA is allowing the GSEs to buy certain mortgages that enter forbearance within the first month after loan closing, prior to delivery to the GSEs.
FHFA also extended several loan origination flexibilities put in place to assist borrowers during the Covid-19 pandemic. Specifically, FHFA has further extended until September 30, the following provisions: “(i) alternative appraisals on purchase and rate term refinance loans; (ii) alternative methods for documenting income and verifying employment before loan closing; and (iii) expanding the use of power of attorney to assist with loan closings.”