MReport November 2020

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M R EP O RT | 49 SERVICING THE LATEST O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T FHA Updates Forbearance Deadline Here's the latest guideline for single-family homeowners with FHA-insured mortgages who need to request an initial forbearance. T he Federal Housing Administration (FHA) and the U.S. Depart- ment of Housing and Urban Development (HUD) an- nounced it is extending the date for single family homeowners with FHA-insured mortgages to request an initial forbearance from their mortgage servicer to defer their mortgage payments for up to six months. Homeowners experiencing financial hardship as a result of the COVID-19 pandemic may now re- quest an initial forbearance through the end of this year, December 31. (Previously, homeowners with FHA-insured mortgages needing assistance had until October 30 to request a COVID-19 forbearance from their mortgage servicer.) HUD Secretary Benjamin Carson said that no American should fear losing a home amid the pandemic. "Today's forbearance re- quest extension for single-family homeowners further solidifies that commitment. I can't stress enough that this relief should be reserved for those that need it most. Americans who are capable of pay- ing their mortgage on time should do so. The great American come back is in full force—if we work together, we can achieve and even surpass the economic prosperity we saw prior to the pandemic." FHA requires mortgage servicers to provide up to six months of COVID-19 forbearance when a homeowner requests this assistance, and up to an additional six months of forbearance for homeowners who request an extension of the initial forbearance. Homeowners needing assistance must engage with their servicer to obtain an initial forbearance or obtain an extension of the initial forbearance. "By providing this important extension, FHA seeks to as- sist those struggling with the continued financial effects of the COVID-19 pandemic," added Dana Wade, Assistant Secretary for Housing and Federal Housing Commissioner. Deputy Assistant Secretary for Single-Family Housing Joe Gormley expounded on the importance of keeping up with payments when possible. "It's always in a homeowner's best interest to make their mort- gage payments if they are able. But for those who are struggling right now, we urge them to engage with their servicer im- mediately. And, if your servicer contacts you, it is crucial that you respond to them to let them know if you need assistance. The last thing FHA wants is for any homeowner to risk losing their homeownership investment if they are eligible for assistance." The FHA statement further broke down FHA requirements for servicers: Offer homeowners with FHA-insured mortgages mortgage payment forbearance when the homeowner requests it, with the option to extend the forbearance for up to a year in total. FHA does not require a lump sum payment at the end of the forbearance period. Assess homeowners who receive COVID-19 forbearance for its special COVID-19 National Emergency Standalone Partial Claim before the end of the for- bearance period. The COVID-19 National Emergency Standalone Partial Claim puts all suspended mortgage payment amounts owed into a junior lien, which the homeowner only repays when they sell the home, refinance the mortgage, or the mortgage is otherwise extinguished. Assess homeowners who are not eligible for the COVID-19 National Emergency Standalone Partial Claim for one of FHA's COVID-19 expanded home retention solutions announced on July 8, 2020. FHFA Extends Policy on Purchasing Mortgages in Forbearance The temporary policy allows the purchase of certain single-family mortgages in forbearance. T he Federal Housing Finance Agency (FHFA) announced a one-month extension of its tem- porary policy of allowing the purchase of certain single-family mortgages in forbearance that meet specific eligibility criteria as set by Fannie Mae and Freddie Mac. The policy, which covered loans originated through October 31, will now encompass loan originations through November 30. The October deadline was also an extension from a previously announced September 30 cutoff date. Prior to the COVID-19 pandem- ic, mortgage loans that were either in forbearance or in a state of delin- quency were ineligible for delivery under the government-sponsored enterprises' (GSEs) requirements. In April, when the pandemic was disrupting the economy and millions of Americans were either furloughed or laid off from their jobs, the FHFA announced a tem- porary policy of allowing certain single-family mortgages in forbear- ance to be delivered. "Eligible loans will continue to be priced to mitigate the height- ened risk of loss to the Enterprises from said loans," said the FHFA in a press statement. "These pruden- tial measures also ensure fulfill- ment of the Enterprises' charter requirements to only purchase loans that meet the purchase standards imposed by private, institutional mortgage investors." The FHFA also stated it would continue the Borrower Protection Program with the Consumer Financial Protection Bureau (CFPB) that shares aggregated data on loans that enter forbear- ance before being delivered to Fannie Mae and Freddie Mac. The FHFA noted this data shar- ing fulfills its obligation under the Qualified Mortgage Patch that ensures loans sold to ensure that loans sold to the GSEs comply with the intent of Dodd-Frank's ability to repay provisions.

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