Friday, June 26, 2020

Real Estate: Fannie Mae revises eligibility for refinancing and home purchasing loans for those impacted by COVID-19

By Ed Pierce

Fannie Mae, a government-sponsored enterprise that makes mortgages available to low- and moderate-income borrowers, has taken steps to help homeowners and those seeking to purchase a home affected by the COVID-19 pandemic by adjusting some guidelines temporarily.

Homeowners who have taken a forbearance, or a temporary postponement of mortgage payments, because of a COVID-19 financial hardship are eligible to refinance their mortgage or buy a new home. Additionally, Fannie Mae is granting a month extension that will enable lenders to sell to Fannie Mae single-family loans currently in forbearance.

“We are listening to and prioritizing our customers’ needs, helping them serve homeowners efficiently and responsibly. Today’s updates provide clarity and support to both lenders and borrowers in a manner that fosters sustainable homeownership, prudently manages enterprise and taxpayer risk, and maintains safety and soundness in the housing finance system,” said Malloy Evans, Fannie Mae’s Senior Vice President and Single-Family Chief Credit Risk Officer.
Under the these new temporary eligibility directives, homeowners who missed payments and have entered into a loss mitigation solution, whether it be a repayment plan, payment deferral, or a loan modification, find themselves now eligible for a new refinance or able to purchase mortgage after making three payments on time.
Evans said that there is no waiting period for borrowers who missed payments due to a COVID-19 financial hardship, but who have since completed reinstatement by repaying the full amount of the outstanding payments missed during the forbearance period.
There also is no waiting period for borrowers who requested forbearance due to a COVID-19 financial hardship but ultimately were able to make all their payments in full and on time, Evans said.
Additionally, Fannie Mae’s ability to purchase single-family mortgages in forbearance have been extended in an effort to provide additional financing options to single-family mortgage lenders. Loans dated on or before June 30, 2020 are extended provided that they loans are delivered by Aug. 31, 2020 and only one mortgage payment has been missed.
Using terms of a COVID-19 forbearance plan, homeowners are required to repay the missed payments, but the new change does not require them to repay the forbearance all at once. When an individual’s plan is up, mortgage servicers must work with the homeowner to determine how they will repay missed payments.

Homeowners and renters are encouraged to can visit Fannie Mae’s website for an overview of the various options available to those who might need help resulting from COVID-19 hardships.

Just since March of this year, Fannie Mae has undertaken a number of significant actions to help homeowners and renters facing COVID-19 financial hardships.

According to a press release issued by Fannie Mae, it has moved to suspend foreclosures and evictions affect ting homeowners, extended and strengthened eviction procedures for multi-family renters when the property owner or landlord received a forbearance, modified schedules for forbearance repayments, created a new COVID-19 payment deferral option to assist homeowners resuming their monthly mortgage payments following a forbearance, and launched “Here to Help,” an educational effort to connect homeowners and renters with tools and resources to navigate available options if they sustain a COVID-19 financial hardship.

"Fannie Mae is committed to providing sustainable housing options to help keep people in their homes," said Hugh R. Frater, Chief Executive Officer for Fannie Mae. "We hope ‘Here to Help’ will bring some clarity, transparency, and assurance to homeowners and renters who are facing job loss, reduction in work hours, illness, or other issues related to COVID-19."
The "Here to Help" online portal at features informative videos, fact sheets, mortgage loan and apartment rental lookup tools,and various other handy resources to equip homeowners and renters with the information they need to successfully navigate their options. The portal also provides mortgage servicers and lenders with tools to better assist their customers.

Some of these new options include a clear explanations of forbearance, repayment options after forbearance, and training videos for loan servicers.

Through "Here to Help," homeowners and residents of multifamily rental properties with a Fannie Mae-backed mortgage can access HUD-approved housing counselors via the Disaster Response Network. Fannie Mae finances about one-in-four homes and one-in-five multifamily mortgage loans in the United States.
"We are committed to putting people first, helping Americans stay in their homes, helping customers stay in business, and ensuring that the nation's mortgage and housing markets remain strong," said Frater. 
Fannie Mae partners with lenders and families across the country and strives to make 30-year fixed-rate mortgages and affordable rental housing possible for millions of Americans. <

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