WASHINGTON–The Federal Housing Finance Authority said Fannie Mae and Freddie Mac have issued temporary guidance regarding the eligibility of borrowers in forbearance, or recently ended their forbearance, looking to refinance and purchase a home.
Separately, the CFPB has extended the comment period for comment for a proposal on time-barred debt disclosures.
According to the FHFA guidance, borrowers are eligible to refinance or buy a new home if they are current on their mortgage—or in forbearance but continued to make payments or reinstated their mortgage. They are also 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, deferral option, loan modification.
“Homeowners who are in COVID-19 forbearance but continue to make their mortgage payment will not be penalized,” said FHFA Director Mark A. Calabria in a statement. “Today’s action allows homeowners to access record low mortgage rates and keeps the mortgage market functioning as efficiently as possible.”
As CUToday.info reported, the FHFA recently announced it is extending the GSE’s previously announced ability to purchase single-family mortgages in forbearance. Fannie Mae and Freddie Mac are now able to buy loans in forbearance, with note dates on or before June 30 as long as they are delivered by August 31 and have missed just one mortgage payment.
The previous policy was set to expire on May 31.
The agency also announced that foreclosure and eviction moratoriums backed by Fannie Mae and Freddie Mac were extended to June 30. Deadlines for that moratorium were set to expire on May 17.
NAFCU Response
In response to the FHFA announcement, NAFCU President and CEO Dan Berger said, “NAFCU appreciates FHFA Director Mark Calabria's continued support for mortgage servicers during the coronavirus pandemic by extending the eligibility date for the GSEs to purchase loans in forbearance. Ensuring the mortgage market remains liquid for homebuyers, including allowing borrowers to refinance their loans in forbearance if they are current on payments, is essential given the pandemic’s impact on our economy. The agency’s action is an important step toward promoting the health of the mortgage market during these uncertain economic times.”
Comment Deadline Extended
Meanwhile, the CFPB has announced itwill provide an additional 60 days for the public to comment on its Supplemental Notice of Proposed Rulemaking (NPRM) on time-barred debt disclosures. The extension is intended to allow all interested parties with additional time to comment on the rulemaking as a result of the impact of the COVID-19 pandemic, the CFPB said.
The deadline was June 5, 2020; the comment period will now close on August 4, 2020.
In the Supplemental NPRM regarding the collection of time-barred debt, the Bureau is proposing to prohibit collectors from using non-litigation means (such as calls) to collect on time-barred debt unless collectors disclose to consumers during the initial contact and on any required validation notice that the debt is time-barred. The Bureau said consumer research it conducted found a time-barred debt disclosure helps consumers understand that they cannot be sued if they do not pay. That can help consumers make better informed decisions whether to pay the debt or not.
The Supplemental NPRM proposes model language and forms that debt collectors could use to comply with the proposed disclosure requirements.
The Federal Register Notice can be found here.