Nonbank mortgage lenders, which have been facing mounting cash flow pressure as homeowners seek forbearance due to economic disruption, could soon get some relief from Fannie Mae and Freddie Mac.
The Federal Housing Finance Agency, which oversees the mortgage-finance giants, may soon allow the agencies to buy home loans that recently entered forbearance, according to the Wall Street Journal. Sources told the Journal that an announcement could be made as early as this week.
“We are working to find out the breadth of the issue and possible solutions,” an FHFA spokesperson told the publication.
While the number of home loans in forbearance has risen dramatically in recent weeks, mortgage companies remain obligated to pay their investors on time. For the week ending April 12, 5.95 percent of home loans in servicers’ portfolio volume were in forbearance, up from 3.74 percent the week before that, according to the latest data from the Mortgage Bankers Association.
The MBA and other industry groups have been pushing for additional federal assistance for weeks, after the $2 trillion stimulus package allowed homeowners to suspend mortgage payments for up to a year without penalties. Another proposal has been for the Federal Reserve to create a liquidity facility to support lenders and free up cash flow.
Last month, Ginnie Mae announced that it would be modifying an existing natural disaster program to support mortgage servicers amid the crisis. Fannie and Freddie have also offered forbearance to multifamily landlords, on the condition that they do not evict renters affected by the pandemic. [WSJ] — Kevin Sun