Eight Democratic senators have called upon the FHFA and the CFPB to do more than just share information to protect borrowers during the corona-virus crisis.
After Sept. 15, Fannie Mae and Freddie Mac will no longer accept LIBOR loan applications. Moreover, the FHFA and the GSEs expect all loan purchases linked to the London benchmark to cease by yearend.
Borrowers now have the option of simply deferring any forborne payments to the end of their mortgage. In effect, this would work like an interest-free second mortgage, and would become due when the house is sold or the loan is refinanced.
Mortgage servicers’ liquidity issues could ease if non-agency lending is acceptable collateral under the TALF programs, according to Urban Institute’s Jim Parrott.
Nonbank servicers increased their holdings of Fannie/Freddie MSR by $54 billion during the first quarter of 2020, with a big chunk of that coming as New Residential boarded Fannie rights it acquired from Ditech last year.
Treasury Secretary Steven Mnuchin said in an interview late Thursday that the Trump administration has no plans to fund a Federal Reserve facility to finance servicer advances.
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.
In an effort to support the industry during the COVID-19 pandemic, mandated use of the redesigned Uniform Residential Loan Application is now scheduled for March 1, 2021.
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