The Federal Housing Finance Agency announced that it has directed mortgage investors Fannie Mae and Freddie Mac to temporarily suspend all foreclosures and evictions until at least mid-May.
The Department of Housing and Urban Development made a similar announcement, providing protection from foreclosure to FHA loan borrowers.
The FHFA’s announcement applies to anyone with a Fannie Mae- or Freddie Mac-backed, single-family mortgage loan.
“This foreclosure and eviction suspension allow homeowners with an Enterprise-backed mortgage to stay in their homes during this national emergency,” FHFA director Mark Calabria said in the news release.
Foreclosure sales and evictions will be halted until at least May 17, 2020.
Coronavirus Mortgage ReliefThe FHFA statement also urged borrowers who are having difficulty keeping up with their mortgage payments due to the spread of COVID-19 to reach out to their mortgage servicers for assistance “as soon as possible.”
Available assistance includes the ability to temporarily reduce or delay mortgage payments for up to 12 months through a forbearance plan. During this period, borrowers in forbearance won’t incur penalties or late fees and won’t have past-due payments reported to the credit bureaus.
Additionally, Fannie and Freddie have directed servicers to work with borrowers to keep their payments manageable at the end of the forbearance period. This could include offering a loan modification to lower their monthly payments or keep them the same following the forbearance period.
For more information, visit the Fannie Mae and Freddie Mac websites.
If Quicken Loans® is currently servicing one of your clients who is in need of assistance, we’re here to help. If your client can’t make their mortgage payment due to job loss or illness caused by COVID-19, they may be eligible for a forbearance. Reach out to your Account Executive if this applies to your client.
Additional Fannie And Freddie ChangesAs the mortgage industry moves to meet the unique demands and challenges brought on by this situation, Fannie Mae and Freddie Mac will relax requirements for appraisals and employment verification to ensure that borrowers can still get mortgages during this time.
The relaxed appraisal requirements will allow appraisals to continue while reducing the need for appraisers to physically go inside homes. Alternatives to traditional appraisals could include desktop appraisals or exterior-only inspection appraisals, according to Fannie Mae.
For employment verification on Fannie- and Freddie-backed loans, lenders are permitted to obtain verification from an applicant’s employer via email or by using a recent year-to-date paystub or bank statement from the borrower in lieu of verbal verification of employment from the employer.
For more information on how this situation is affecting our mortgage process, click here.