If servicers’ cash crunch becomes critical, the onus of creating a liquidity facility would fall on the Federal Reserve and Treasury, not on the FHFA, agency Director Mark Calabria said.
At the end of the forbearance period, mortgage servicers will provide homeowners several options for making up missed payments, Fannie Mae and Freddie Mac reassured borrowers.
The only rule explicitly stated by the GSEs is “forbearance does not mean payments are forgiven.” Meanwhile, the FHFA and CFPB have joined hands to protect consumers from fraudulent forbearance activities.
Regulators have acknowledged that the lack of legal clarity and the speedy implementation of the new forbearance requirements may set the stage for exploitation by unscrupulous or ill-informed servicers.
Of course, early this spring, the FHFA, in trying to aid consumers economically impacted by the pandemic, requested that servicers provide forbearance.
In an industry update, Keefe, Bruyette & Woods predicts it may still take some time before the establishment of an emergency funding facility for residential servicers with MBS payments coming due.