Fannie Mae

Fannie Mae and Freddie Mac have been slammed for planning an additional refinancing charge to cover COVID-related losses, but the head of the Federal Housing Finance Agency defended the policy in House testimony.

Low rates, along with increased new and existing home sales activity drives the latest forecast.

After flattening over the three prior weeks, the number of loans going into coronavirus-related forbearance dove at a rate not seen since early August, according to the Mortgage Bankers Association.

That, along with continued high refinance volume over the next three months, keeps originators' profit forecasts elevated, Fannie Mae said.

"The current economic crisis continues to disproportionately impact borrowers with FHA and VA loans," said Mike Fratantoni, the MBA's senior vice president and chief economist.

As bidding wars raged on and mortgage rates remained near historic lows, housing market confidence grew in August, according to Fannie Mae.

The Federal Housing Finance Agency's proposal could undermine the companies’ mission to support the housing market and penalize consumers in underserved communities, industry and consumer groups say.

The agency’s plan to extend the "qualified mortgage" stamp of approval to more loans could help lenders that rely on alternative data and cushion the blow of other QM changes for Fannie Mae and Freddie Mac.

The pandemic drives home the point that without those funds being siphoned off, the recent fee hikes would not be necessary.

For the first time since June 7, the number of loans going into coronavirus-related forbearance didn't decrease from the week before, according to the Mortgage Bankers Association.