The Federal Housing Finance Agency said it will revise the treatment of active single-family mortgages backed by Fannie Mae and Freddie Mac for which borrowers elected a COVID-19 forbearance under the enterprises' representations and warranties framework.
FHFA expands ‘rep and warrant’ relief to loans with COVID-19 forbearance
October 17, 2023 / By ICBA
The Federal Housing Finance Agency said it will revise the treatment of active single-family mortgages backed by Fannie Mae and Freddie Mac for which borrowers elected a COVID-19 forbearance under the enterprises' representations and warranties framework.
The Federal Housing Finance Agency said it will revise the treatment of active single-family mortgages backed by Fannie Mae and Freddie Mac for which borrowers elected a COVID-19 forbearance under the enterprises' representations and warranties framework.
Details: Under the updated policies, loans for which borrowers elected a COVID-19 forbearance will be treated similarly to loans for which borrowers obtained forbearance due to a natural disaster. As a result, loans with a COVID-19 forbearance will remain eligible for certain rep and warrant relief based on the borrower's payment history over the first 36 months following origination.
Background: The enterprises' existing rep and warrant policies with respect to natural disasters allow the time the borrower is in forbearance to be included when demonstrating a satisfactory payment history in the first 36 months following origination. These policies will now extend to loans for which borrowers elected a COVID-19 forbearance.
Effective Date: These updates will be effective starting Oct. 31.
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