In her letter, Rep. Waters acknowledges the need to manage the risk associated with forbearance loans, bu recommends an alternative to the steep LLPAs leveled by FHA and FHFA. Instead, the congresswoman says those costs should be spread across the agencies’ broader single-family portfolios, resulting in “near-negligible costs on any individual loan.”
The senators write: “The CFPB and FHFA must also have plans to use their respective tools and authorities to immediately address trends that indicate borrowers are receiving inaccurate information or unequal treatment, or that servicers are not complying with the law.”
KBW believes the Freddie announcement could improve valuations for mortgage servicing rights “as the market reduces its expectations for potential servicing advance costs.”
The new policy applies to borrowers who can afford to resume making their regular monthly mortgage payments, but are unable to cover the remittances they missed during forbearance...
In addition, Fannie and Freddie have helped reduce face-to-face interactions during the closing process by expanding the use of powers of attorney and remote online notarizations.
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.
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