WASHINGTON—The Federal Housing Finance Agency has announced a number of new moves aimed at ensuring liquidity in the housing market during the coronavirus pandemic.
The agency announced changes to allow the government-sponsored enterprises (GSEs) to enter into additional dollar roll transactions, provide alternative flexibilities to satisfy appraisal and employment verification requirements, and suspend evictions for renters unable to pay rent due to the coronavirus.
Allowing the GSEs to enter additional dollar roll transactions, which provide mortgage-backed securities (MBS) investors with short-term financing of their positions, will help provide liquidity to these investors. The FHFA explained that "eligible collateral is limited to Agency mortgage-backed securities and the transactions must be undertaken via an auction or similar mechanism to ensure that they occur at a fair market price."
The FHFA said leveraging appraisal alternatives will help "reduce the need for appraisers to inspect the interior of a home for eligible mortgages."
"In addition, in the event lenders cannot obtain verbal verification of the borrower's employment before loan closing, the Enterprises will allow lenders to obtain verification via an e-mail from the employer, a recent year-to-date paystub from the borrower, or a bank statement showing a recent payroll deposit," the agency said.
Available Through Mid-May
The newly announced flexibilities will be in place through May 17. Fannie Mae released lender letters related to the appraisal changes and loan originations for single-family sellers, which covers employment verification. Freddie Mac also has a guidance bulletin available on these issues.
As CUToday.info reported, the FHFA last week directed the GSEs to suspend foreclosures and evictions for at least 60 days, and the Department of Housing and Urban Development also authorized the Federal Housing Administration to suspend foreclosures and evictions for single-family homeowners with FHA-insured mortgages for the next 60 days.