The loan rules that were in place before the pandemic left borrowers with little clarity on how they could get future mortgages or refinance their loans. However, on Tuesday, the director of the Federal Housing Financing Agency, which regulates Fannie Mae and Freddie Mac, announced that borrowers can now refinance or buy a house with a new mortgage if they have started to pay off their current mortgage. .
They can do this if they are in the abstention program, or also if they have already graduated. But they must have made at least three months of payments. Previous guidelines had stated that borrowers must be up to date on their mortgage for at least a year.
“Homeowners who are abstaining from COVID-19 but continue to make their mortgage payments will not be penalized,” said FHFA director Mark Calabria. “Today’s action is providing homeowners with access to record mortgage rates and keeping the mortgage market as efficient as possible.” “
There had been some confusion on the part of lenders and service agents as to when borrowers now up to date on their loans could re-enter the market. In addition, some borrowers claimed that they had been unconsciously included in the forbearance program simply by calling to request information about it.
“We appreciate the clear advice from the FHFA and believe that these responsible metrics will allow lenders to serve well-qualified borrowers in the purchase of a new home,” said Debra Still, President and CEO of Pulte Mortgage, a division of one of the largest home builders in the country. .
The FHFA is also expanding the ability of Fannie and Freddie to purchase forfeited single-family mortgages. They can now purchase forbidden loans, with note dates no later than June 30, provided they are delivered to both before August 31 and have only one. single mortgage payment missed. The previous policy was to expire on May 31.
“These welcome measures ensure that homeowners who continue to make payments on time – and those who have successfully forfeited the forbearance – can benefit from near-low mortgage rates,” said Bob Broeksmit, CEO of the Mortgage Bankers Association. “It also allows the mortgage market to function efficiently and helps to alleviate the current constraints of credit availability.
Borrowers can apply for mortgage forbearance without proof of difficulty, only stating that they are unable to make their monthly payments. Although the number of borrowers continues to increase, now with just over 8% of all borrowers in forbearance, according to the MBA, the weekly volume of new applicants is decreasing.