WASHINGTON—Treasury Department Secretary Steven Mnuchin said the Federal Reserve doesn't plan to create a facility to support nonbank mortgage servicers.
NAFCU has been calling on the Federal Housing Finance Agency (FHFA) to take steps to support mortgage servicers, including credit unions, that could be negatively impacted by increased forbearance requests as a result of the coronavirus.
Under the CARES Act, borrowers experiencing financial hardship during the coronavirus crisis may request forbearance on single-family and multifamily loans sold to the GSEs, and in response mortgage servicers must provide a forbearance that allows borrowers to defer their mortgage payments up to 180 days with an option for an additional 180-day extension. It also provided the opportunity for the Fed to create a mortgage servicer facility, but did not require it to do so.
FHFA Announcement
While the CARES Act didn't provide relief for mortgage servicers, the FHFA last week announced it will provide a four-month limit on advances of principal and interest payments for loans in forbearance sold to the government-sponsored enterprises (GSEs). It will also allow the GSEs to purchase mortgages in forbearance.
"It is important the mortgage market continues to support homeowners, and the agency’s modified eligibility requirements for the GSEs purchasing of loans in forbearance is a positive step toward keeping the mortgage market liquid for homebuyers," NAFCU president Dan Berger said in response. "However, it is also important to note that the new fees attached to the sale of loans may be cost prohibitive for many credit unions and limit affordable loan options for homebuyers, and NAFCU is remaining closely engaged with the agency to see where additional relief measures can be made."