Are you currently in mortgage forbearance or considering forbearance? Have you called your lender/servicer and wanted better forbearance options that what was initially offered? In this video, we discuss the recent change from the FHFA and what is finally being put in place to add some liquidity to the market.
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For the last few week, you’ve heard me as well as many others talk about how lenders/servicers need liquidity to help with all of the forbearance requests due to covid-19.
As of today , the FHFA (Federal Housing Finance Agency) is moving to help servicers who collect payments on loans backed by Fannie Mae and Freddie Mac, but not in the way that servicers or we were expecting.
Here’s how the FHFA describes the change:
“When a mortgage loan is in a Mortgage-Backed Security (MBS), Fannie Mae servicers with a scheduled payment remittance are responsible for advancing the principal and interest payment regardless of borrower payments. Freddie Mac servicers, who are generally responsible for advancing scheduled interest, are only obligated to advance four months of missed borrower interest payments. ”
“Rather than setting up a liquidity facility, which would help servicers cover the principal and interest payments they are required to send investors on loans that are in forbearance, the FHFA is changing Fannie and Freddie’s policies to limit the number of payments servicers will be required to make.
Under the new policy, servicers will only be required to advance four months of missed payments for loans in forbearance. After that, the servicer is under “no further obligation to advance scheduled payments.””
This change in policy should now create better forbearance options and put some consistency in what is current being offered by different lenders/servicers. In addition, servicers will be more likely to extend your forbearance request if needed.
The FHFA said that this change in policy “reduces the potential liquidity demands on the Enterprises resulting from loans in COVID-19 forbearance and delinquent loans.”
If you have additional questions about forbearance mortgage or mortgage forbearance, please call me directly or comment below.
Thanks for watching.
Information from today’s video and description came from Housing Wire – https://www.housingwire.com/articles/…
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