Hannah Lang

The policy comes more than a month after a different agency issued similar guidance for loans backed by Fannie Mae and Freddie Mac.

The Consumer Financial Protection Bureau seeks to address challenged posed by the sunset of the London interbank offered rate at the end of 2021.

Some observers wonder if proposed regulatory targets for Fannie Mae and Freddie Mac will stoke concerns about low shareholder returns. But others suggest those fears are unfounded.

The much-anticipated proposal, which would not go into effect until after Fannie Mae and Freddie Mac are privatized, reflects Director Mark Calabria’s aggressive efforts to get the companies on a strong financial footing.

Director Mark Calabria, who abandoned the Fannie and Freddie capital proposal written by his predecessor, said he expects a revised framework to be ready “very soon.”

The Federal Housing Finance Agency clarified that borrowers with Fannie Mae- or Freddie Mac-backed mortgages who have entered into forbearance plans can be eligible for a refi or new purchase once they are considered “current” on their mortgage.

The two mortgage giants said they would begin the process of hiring outside firms to help raise capital that will be needed to exit conservatorship.

Democrats’ latest proposal to back debt collectors, enable loans for nonprofits and provide other relief could help steer negotiations with the Senate on more stimulus.

The agency's announcement came one day after the agency said it would provide borrowers struggling to stay current with an additional payment deferral option.

The head of the U.S. central bank said its emergency credit programs were not designed to prop businesses up over the long term.

Lenders implemented stricter underwriting across all loan types in the first quarter as the pandemic upended the economy, the Federal Reserve said in its survey of loan officers.

The Home Loan bank will make zero-interest loans, match charitable donations that members make to nonprofits and small businesses, and provide additional funding for economic development grants.

Fannie Mae and Freddie Mac are now able to buy loans in forbearance to alleviate pressure on the sector, but the fees charged by the mortgage giants to assume more risk could turn away some originators.

The Federal Housing Administration has provided struggling homeowners with payment flexibility and explored other measures. At the same time, the agency is mindful of protecting itself against downside risks.

The policy move will allow small institutions participating in the Paycheck Protection Program to pledge business loans as collateral to obtain advances.

The FHFA will allow Fannie Mae and Freddie Mac, for a limited time, to purchase loans for which the borrower has sought to postpone payments because of the economic effects of the coronavirus.

Efforts to calm lenders’ fears about coronavirus-related forbearance may not offset tightening standards, and the FHA is less likely to boost volume than it was during the financial crisis.

Tenants have threatened to suspend payments during the pandemic to pressure officials into providing rental assistance, but the effects on multifamily loans would compound concerns about servicers' liquidity and, ultimately, lenders' performance.

Federal Housing Finance Agency Director Mark Calabria said a virus-induced financial crisis might give rise to more delinquencies and foreclosures than the 2007 subprime mortgage meltdown.

The central bank's sweeping actions suggest a cash shortage gripping sectors directly hit by the pandemic. Banks were supposed to be protected by Dodd-Frank but are still vulnerable to a funding domino effect.