{"id":17237,"date":"2020-04-24T13:03:49","date_gmt":"2020-04-24T13:03:49","guid":{"rendered":"http:\/\/www.anthonydidonato.net\/wordpress\/?p=17237"},"modified":"2020-04-24T13:03:49","modified_gmt":"2020-04-24T13:03:49","slug":"fannie-freddie-to-buy-mortgages-in-forbearance","status":"publish","type":"post","link":"https:\/\/www.anthonydidonato.net\/wordpress\/fannie-freddie-to-buy-mortgages-in-forbearance\/","title":{"rendered":"Fannie, Freddie to Buy Mortgages in Forbearance"},"content":{"rendered":"

Fannie, Freddie to Buy Mortgages in Forbearance<\/h1>\n
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Some borrowers who\u2019ve obtained a mortgage are going into forbearance before the loan can be sold by the lender to a government-sponsored enterprise. As a result, the Federal Housing Finance Agency announced Wednesday that for a limited time it will be directing mortgage financing giants Fannie Mae and Freddie Mac (the enterprises) to purchase home loans that have gone into forbearance shortly after closing. The agency says it hopes this step will get the mortgage market moving and help ease home lending as a wave of mortgages fall into forbearance due to the COVID-19 pandemic.<\/p>\n

\u201cWe are focused on keeping the mortgage market working for current and future homeowners during these challenging times,\u201d FHFA Director Mark Calabria said in a statement. \u201cPurchases of these previously ineligible loans will help provide liquidity to mortgage markets and allow originators to keep lending.\u201d<\/p>\n

Banks have been requesting servicing relief and have tightened underwriting standards for new mortgages as more than 3 million loans have fallen into forbearance due to the pandemic. But when homeowners suspend their mortgage payments, servicers are still on the hook for making tens of billions in payments to bondholders. As such, banks have begun tightening underwriting standards. For example, JP Morgan Chase, the nation\u2019s largest lender by assets, last week announced that the majority of new customers applying for a mortgage will need a minimum credit score of 700 and down payment of at least 20% of the home\u2019s value.<\/p>\n

Under Wednesday\u2019s announcement, the GSEs will buy loans\u2014for home purchase or refinancing\u2014that go into forbearance within one month after the loan closing. The banks, however, will have to pay 5% to 7% of the loan\u2019s value to sell the loan in forbearance to the GSEs. For a $200,000 loan to a first-time buyer, that could mean the lender will have to pay $10,000 to sell the loan. Some banks could lose money on the loan, but they\u2019ll have to weigh whether they want to hold a delinquent loan in their portfolios.<\/p>\n

\u201cThe FHFA has identified one of several issues impacting liquidity in the market, and NAR appreciates its efforts on that front, but the FHFA\u2019s actions do not solve the problems hurting average American home buyers and the economy,\u201d says NAR President Vince Malta. \u201cWe urge the agency and Director Calabria to continue working toward a solution that will protect American home buyers and our nation\u2019s economic recovery efforts.\u201d<\/p>\n

In the past, Fannie Mae and Freddie Mac have not purchased loans in forbearance, since they consider them delinquent. However, the enterprises are chartered by Congress and tasked with maintaining liquidity in the market for real estate investments.<\/p>\n

In order for a loan to be eligible under Fannie Mae and Freddie Mac\u2019s new buyback program, the mortgage loan must have closed on or after Feb. 1 and before May 31. The loan must be a mortgage purchase transaction or a no-cash-out refinance. The loan cannot be more than 30 days delinquent.<\/p>\n

To help ease lending during this time, the National Association of REALTORS\u00ae, along with other housing and banking industry groups, has been calling on financial regulators to create a liquidity facility set up by the Federal Reserve and backed by the U.S. Treasury. The liquidity facility would provide a pool of money that servicers could use to make short-term loans and help ensure the stability of the housing finance market. NAR issued a letter to the Treasury Department on March 27 pushing for greater relief in mortgage servicing. <\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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Source:<\/div>\n
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\u201cHousing Regulator Moves to Ease Crunch at Mortgage Companies<\/a>,\u201d The Wall Street Journal (April 22, 2020) and \u201cFannie and Freddie Will Now Buy Loans in Mortgage Bailout Program, in a Bid to Loosen Lending<\/a>,\u201d CNBC (April 22, 2020)<\/div>\n
National Association of REALTORS<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Fannie, Freddie to Buy Mortgages in Forbearance Some borrowers who\u2019ve obtained a mortgage are going into forbearance before the loan can be sold by the lender to a government-sponsored enterprise. As a result, the Federal Housing Finance Agency announced Wednesday that for a limited time it will be directing mortgage financing giants Fannie Mae and … <\/p>\n

Continue reading<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,8],"tags":[5,32,4,9],"class_list":["post-17237","post","type-post","status-publish","format-standard","hentry","category-news","category-real-estate-tips","tag-anthony-didonato","tag-news","tag-real-estate","tag-tips","item-wrap"],"yoast_head":"\nFannie, Freddie to Buy Mortgages in Forbearance - Real Estate Agent and Sales in PA - Anthony DiDonato Broomall, Media, Delaware County and surrounding areas in Pennsylvania<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.anthonydidonato.net\/wordpress\/fannie-freddie-to-buy-mortgages-in-forbearance\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/fannie-freddie-to-buy-mortgages-in-forbearance\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/fannie-freddie-to-buy-mortgages-in-forbearance\\\/\"},\"author\":{\"name\":\"admin\",\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/#\\\/schema\\\/person\\\/964792b6994e8cc4cbddc36ad4824908\"},\"headline\":\"Fannie, Freddie to Buy Mortgages in Forbearance\",\"datePublished\":\"2020-04-24T13:03:49+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/fannie-freddie-to-buy-mortgages-in-forbearance\\\/\"},\"wordCount\":633,\"publisher\":{\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/#\\\/schema\\\/person\\\/964792b6994e8cc4cbddc36ad4824908\"},\"keywords\":[\"Anthony DiDonato\",\"News\",\"Real Estate\",\"tips\"],\"articleSection\":[\"News\",\"Real Estate Tips\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/fannie-freddie-to-buy-mortgages-in-forbearance\\\/\",\"url\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/fannie-freddie-to-buy-mortgages-in-forbearance\\\/\",\"name\":\"Fannie, Freddie to Buy Mortgages in Forbearance - 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