Borrowers with mortgages backed by Fannie Mae or Freddie Mac will be eligible for another three months of forbearance, the Federal Housing Finance Agency announced this week.

The FHFA said in a statement that borrowers with a COVID-19 forbearance plan on Feb. 28 could request an extension of up to three months, giving homeowners with mortgages backed by Fannie Mae or Freddie Mac up to 15 months of forbearance. These borrowers previously could receive up to 12 months of forbearance.

The extension will also affect Fannie and Freddie’s COVID-19 Payment Deferral program. The program allows borrowers to repay their missed payments at the time the home is sold, refinanced or at mortgage maturity. The program will now cover up to 15 months of missed payments.

The FHFA also this week extended until March 31 the moratoriums on single-family foreclosures and evictions from real estate owned (REO) properties that have been acquired by the government-sponsored enterprises. The moratoriums were scheduled to expire Feb. 28.

“To keep families in their home during the pandemic, FHFA is allowing borrowers to be in COVID-19 forbearance for up to 15 months and extending the Enterprises’ foreclosure and eviction extension,” FHFA Director Mark Calabria said in the statement.

The FHFA said it currently projects the GSEs to have expenses of $1.5 billion to $2 billion related to the existing COVID-19 foreclosure moratorium and its extension.

“FHFA continues to monitor the effect of the COVID-19 servicing policies on borrowers, the Enterprises and their counterparties, and the mortgage market,” the statement said. “FHFA may extend or sunset its policies based on the data and the health risk.”

The Mortgage Bankers Association in its weekly Forbearance and Call Volume Survey said 3.07 percent of Fannie Mae and Freddie Mac loans were in forbearance for the week ending Jan. 31, a 3-basis-point improvement from the previous week.

Overall, the MBA said 5.35 percent of servicers’ portfolio volume was in forbearance as of Jan. 31, down from 5.38 percent the prior week. The MBA estimated that 2.7 million homeowners are in forbearance plans.

Forbearance Extended for Fannie, Freddie Loans

by Banker & Tradesman time to read: 1 min