Hat tip Susie!
FOR IMMEDIATE RELEASE
May 19, 2020
Washington, D.C. – Today, to support borrowers and mortgage servicers, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the Enterprises) have issued temporary guidance regarding the eligibility of borrowers who are in forbearance, or have recently ended their forbearance, looking to refinance or buy a new home.
Borrowers are eligible to refinance or buy a new home if they are current on their mortgage (i.e. in forbearance but continued to make their mortgage payments or reinstated their mortgage). Borrowers are eligible to refinance or buy a new home three months after their forbearance ends and they have made three consecutive payments under their repayment plan, or payment deferral option or loan modification.
“Homeowners who are in COVID-19 forbearance but continue to make their mortgage payment will not be penalized,” said Director Mark Calabria. “Today’s action allows homeowners to access record low mortgage rates and keeps the mortgage market functioning as efficiently as possible.”
FHFA is also extending the Enterprises previously announced ability to purchase single-family mortgages in forbearance. The Enterprises are now able to buy forborne loans, with note dates on or before June 30, 2020, as long as they are delivered to the Enterprises by August 31, 2020 and have only one mortgage payment has been missed. The previous policy was set to expire on May 31, 2020.
Fannie Mae and Freddie Mac also extended their moratorium on foreclosures and evictions until at least June 30, 2020. The foreclosure moratorium applies to Enterprise-backed, single-family mortgages only. The current moratorium was set to expire on May 17th.
Click here to see if your mortgage is owned by Fannie Mae:
https://www.knowyouroptions.com/loanlookup
Check here for Freddie Mac:
Typically, borrowers can only get a new mortgage, whether it’s to refinance or to buy a home, a year after their payments are up to date post-forbearance.
That rule became a problem for many homeowners who said they were put into forbearance agreements accidentally, according to a report from CNBC. Some of these homeowners complained to the Consumer Financial Protection Bureau that lenders were not accepting their loan payments because they were put in forbearance, despite assurances to the contrary.
The old rule also may have created headaches for many homeowners who chose to enter into forbearance out of an abundance of caution.
The CARES Act required servicers to provide any homeowner with a federally-backed mortgage with forbearance, essentially with no questions asked. That made it much easier to skip mortgage payments.
A recent survey from LendingTree found that 70% of homeowners who were approved for forbearance didn’t need it and simply wanted a break from their monthly payments.
https://www.marketwatch.com/story/mortgage-regulator-to-loosen-refinance-restrictions-for-home-loans-in-forbearance-2020-05-19
http://www.doctorhousingbubble.com/the-forbearance-tsunami-4-7-million-mortgages-are-now-in-forbearance-with-an-unpaid-principal-of-1-trillion/
All doom from the doctor, of course, and no recognition that you don’t have to make your mortgage payments any more in California – even before covid-19. Lenders will kick your file down the road…..unless you have ample equity and make no attempt to loan-mod.