FHFA

Treating COVID-19 forbearances as a natural disaster will likely mean the MIs will not need to hold as much capital.

The Federal Housing Finance Agency has promised to take care of advances on principal and interest payments for coronavirus forbearances after four months, but servicers remain concerned about other responsibilities.

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.

The agency said it is aligning policies for Fannie Mae- and Freddie Mac-backed loans in forbearance so that servicers are only responsible for advancing four months of missed payments.

Fannie Mae and Freddie Mac's regulator is confronting a fresh crisis for the U.S. housing market: The companies won't buy recently issued loans that were made to borrowers who already can't afford their monthly payments because of coronavirus.

Federal backing for firms facing a deluge of missed mortgage payments is still on the table despite recent comments by an official who questioned the need to help the industry.

The Borrower Protection Program enables the two agencies to exchange information about loss mitigation efforts and consumer complaints regarding specific servicers.

The nascent market for private U.S. mortgages is teetering on the brink of collapse as the coronavirus crisis imperils years of work to lessen the government's role in home lending.

At issue is whether the U.S. should step in now to save nonbank mortgage servicers to head off damage to the housing market.