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  • FHFA proposes rule for new GSE products

    Agency Rule-Making & Guidance

    On October 19, the FHFA announced a notice of proposed rulemaking (NPR) that would require Fannie Mae and Freddie Mac (GSEs) to provide advance notice to FHFA of new activities and obtain prior approval before launching new products. According to a factsheet released in conjunction with the proposed rule, the NPR would allow “FHFA to assess the impact, risks, and benefits of a new activity, and to determine whether the new activity is a new product that merits public notice and comment,” and would replace an interim final rule that has been in effect since 2009. Among other things, the NPR would (i) establish revised criteria for determining “what is a new activity and a new product, and the process for that activity’s review and approval” by FHFA; (ii) provide a “unified notice process,” which will require the GSEs “to make a single form of submission”; (iii) streamline and simplify the advance notification process; and (iv) outline FHFA’s process for reviewing notices of new activity and provide timelines for both the public notice and request for comment period as well as final approval. Comments on the NPR must be submitted within 60 days of publication in the Federal Register.

    Agency Rule-Making & Guidance FHFA GSE Fannie Mae Freddie Mac

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  • FHFA extends Covid-19 flexibilities until November 30

    Federal Issues

    On October 19, the FHFA announced the extension of several loan origination guidelines put in place to assist borrowers during the Covid-19 pandemic. Specifically, FHFA extended until November 30 existing guidelines related to: (i) alternative appraisal requirements 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. The extensions are implemented in updates to Fannie Mae Lender Letters LL-2020-03, LL 2020-04, and Freddie Mac Guide Bulletin 2020-37.

    Federal Issues FHFA Mortgages Fannie Mae Freddie Mac GSE

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  • FHFA extends policy allowing GSEs to buy mortgages in forbearance

    Federal Issues

    On October 21, FHFA announced an extension of a temporary policy related to the Covid-19 pandemic that allows Fannie Mae and Freddie Mac (GSEs) to purchase qualified single-family mortgages in forbearance that meet specific eligibility criteria. The policy is now extended for loans originated through November 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.

    The extensions are implemented in updates to Fannie Mae Lender Letter LL-2020-06, and Freddie Mac Guide Bulletin 2020-41.

    Federal Issues FHFA Covid-19 Fannie Mae Freddie Mac GSE

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  • GSEs give more Covid-related guidance

    Federal Issues

    On October 14, Fannie Mae and Freddie Mac (collectively, “GSEs”) clarified that a borrower will not lose any future “pay for performance” HAMP incentives if the borrower: (i) immediately reinstates the mortgage loan upon expiration of the Covid-19-related forbearance plan; or (ii) transitions directly from a Covid-19 related forbearance plan to a repayment plan. The GSEs previously clarified that if a mortgage loan was modified pursuant to a HAMP modification and the borrower remains in good standing, the borrower will not lose any pay for performance incentives if the borrower had a Covid-19 related hardship immediately preceding the Covid-19 payment deferral (covered by InfoBytes here and here). The updates are reflected in Fannie Mae’s Lender Letters LL-2020-02, LL-2020-07, and Freddie Mac’s Guide Bulletin 2020-39.

    Federal Issues Fannie Mae Freddie Mac Covid-19 Mortgages

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  • Fannie Mae updates Covid-19 Seller FAQs

    Federal Issues

    On October 8, Fannie Mae updated its Covid-19 Seller FAQs to include new guidance covering, among other things, (i) general standards for audited profit and loss statements; (ii) when a mortgage loan is considered to be reinstated; (iii) reusing desktop and exterior-only appraisals for subsequent refinances; and (iv) using credit supplements as a form of due diligence to determine whether a borrower’s existing mortgage payments are current. Additionally, Fannie Mae updated previous questions related to refinancing an existing loan in forbearance and timely payments in certain repayment plans.

    Federal Issues Fannie Mae Mortgages Covid-19

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  • FHFA extends Covid-19 flexibilities until October 31

    Federal Issues

    On September 24, the FHFA announced the extension of several loan origination guidelines put in place to assist borrowers during the Covid-19 pandemic. Specifically, FHFA has extended until October 31 existing guidelines related to: (i) GSE purchases of qualified single-family mortgages in forbearance that meet specific eligibility criteria; (ii) alternative appraisal requirements on purchase and rate term refinance loans; (iii) alternative methods for documenting income and verifying employment before loan closing; and (iv) expanding the use of power of attorney to assist with loan closings. The extensions are implemented in updates to Fannie Mae Lender Letters LL-2020-03, LL 2020-04, LL-2020-06, and Freddie Mac Guide Bulletin 2020-37.

    Federal Issues FHFA Fannie Mae Freddie Mac Mortgages Forbearance Covid-19

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  • Fannie Mae updates Covid-19 selling FAQs

    Federal Issues

    On September 17, Fannie Mae updated its Covid-19 FAQs for sellers to include a new question about whether federal student loan payments that are placed in a Covid-related forbearance should count towards a borrower’s debt-to-income ratio. Additionally, Fannie Mae updated previous questions covering the purchase of loans that are in forbearance, including whether a lender owes the loan level pricing adjustment (LLPA). Specifically, the FAQs state that if a forbearance begins any time on the sale date of the loan, lenders owe the LLPA to Fannie Mae.

    Federal Issues Fannie Mae Mortgages Covid-19

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  • Fannie and Freddie update Covid-19 Selling FAQs

    Federal Issues

    On September 2, Fannie Mae updated its Covid-19 FAQs for sellers to reflect updates to FHFA’s 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 (covered by InfoBytes here), and to add a new question covering Covid-19 appraisal flexibilities. On August 27, Freddie Mac updated its Covid-19 selling-related FAQs to include substantially the same new question and response with respect to Covid-19 appraisal flexibilities.

    Federal Issues Covid-19 Fannie Mae Freddie Mac FHFA Mortgages

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  • Agencies extend foreclosure moratorium and other Covid-19 flexibilities

    Federal Issues

    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.”

    Federal Issues Agency Rule-Making & Guidance FHFA Covid-19 Fannie Mae Freddie Mac Forbearance Mortgages GSE

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  • FHFA delays implementation of new refinance fee

    Federal Issues

    On August 25, FHFA announced that it will delay implementation of Fannie Mae and Freddie Mac’s new adverse market refinance fee until December 1. As previously covered by InfoBytes, the adverse market refinance fee of 50 basis points, or 0.5 percent, was originally slated to apply to certain refinance mortgages with settlement dates on or after September 1. FHFA received significant pushback regarding the fee, including concerns about its expedited implementation period, and lack of information regarding the market conditions that would be addressed by the change (see InfoBytes coverage here). In the new announcement, FHFA states that the fee is “necessary to cover projected COVID-19 losses of at least $6 billion at the Enterprises,” noting that $6 billion is the “conservatively projected” cost of actions taken to protect renters and borrowers based on (i) “$4 billion in loan losses due to projected forbearance defaults”; (ii) “$1 billion in foreclosure moratorium losses”; and (iii) “$1 billion in servicer compensation and other forbearance expenses.”

    Federal Issues FHFA Refinance Fannie Mae Freddie Mac Covid-19 Mortgages

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