The Federal Housing Finance Agency announced on Wednesday that Fannie Mae and Freddie Mac would continue to buy qualified loans in forbearance until Sept. 30, extending the previous deadline of Aug. 31.
The GSEs will also extend other loan flexibilities initiated during the pandemic, including accepting alternative appraisals on purchase and rate term refinance loans, alternative methods for documenting income and verifying employment before closing, and expanding the use of power of attorney to assist with loan closings.
“Extending these COVID-19 flexibilities helps keep the mortgage market moving and borrowers safe during the pandemic,” said FHFA Director Mark Calabria.
The move was applauded by various mortgage industry groups.
“MBA and its members appreciate FHFA and the GSEs extending these important features,” said MBA President and CEO Bob Broeksmit. “Both the origination flexibilities and the program to purchase loans in forbearance are providing important stability to the mortgage market during the pandemic, and today’s announcement will enable lenders to continue to make low rate mortgage financing readily available to consumers and avoid the inevitable credit tightening that would have resulted from their expiration.”
Fannie Mae and Freddie Mac began buying loans in forbearance in April. The number of loans in forbearance has fallen to 7.2% of total mortgage loans, the MBA reported on Monday, meaning about 3.6 million homeowners are in forbearance plans.