Fannie Mae and Freddie Mac

FHFA Provides Tenant Protections

 

On June 29, the Federal Housing Finance Agency (FHFA) provided additional protections for owners and renters of multifamily properties by allowing servicers to extend existing forbearance agreements for up to three months, for a total forbearance of up to six months for multifamily property owners with loans backed by Fannie Mae and Freddie Mac. Borrower may qualify for up to 24 months to repay the missed payments once the forbearance period concludes, and borrowers must comply with additional tenant protections during this period. Release.

CFPB Issues Proposals to Amend Qualified Mortgage Definition and Extend GSE Patch

 

On June 22, the CFPB issued two notices of proposed rulemaking (NPRMs) regarding the Qualified Mortgage (QM) exemption from the ability-to-repay requirements of Regulation Z. The first proposal would, among other changes, revise the general QM loan definition by replacing the QM borrower debt-to-income ratio limit with a price-based approach to determining loan eligibility. The second proposal would extend the current January 2021 sunset date in the provision granting QM status to mortgages eligible for purchase by Fannie Mae or Freddie Mac (the “GSE Patch”) to the date on which the amendments to the general QM loan definition become effective. Comments on the NPRM to revise the general QM loan definition are due 60 days following publication in the Federal Register. Comments on the NPRM to extend the GSE Patch are due 30 days following publication. Release. NPRM (General QM Loan Definition). NPRM (GSE Patch Extension).

FHFA Extends Loan Processing Flexibilities for Fannie Mae and Freddie Mac Customers

 

On May 5, the Federal Housing Finance Agency (“FHFA”) extended loan origination flexibilities offered by Fannie Mae and Freddie Mac until at least June 30th. The extended flexibilities aim to help borrowers during the COVID-19 pandemic by facilitating loan closings and include: (1) alternative appraisals on purchase and rate term refinance loans; (2) alternative methods for verifying employment; and (3) expanding the use of power of attorney and remote online notarizations. Release.

FHFA Suspends Foreclosures and Evictions for Enterprise-Backed Mortgages

 

On March 18, the Federal Housing Finance Agency (FHFA) and the U.S. Department of Housing and Urban Development (HUD) made a joint announcement to suspend all foreclosures and evictions for homeowners with mortgages backed by Freddie Mac and Fannie Mae for 60 days. The moratorium on evictions and foreclosures aim to provide relief for borrowers impacted by the coronavirus pandemic. FHFA Release. HUD Release. CFPB Release.

FHFA Strengthens Evaluation Criteria for GSE’s Duty to Serve Program

 

On March 11, the Federal Housing Finance Agency (FHFA) issued revised guidance for evaluating Underserved Markets Plans submitted by Fannie Mae and Freddie Mac (the “GSEs”) for FHFA approval under the Duty to Serve regulation. The revised guidance strengthens the criteria for determining GSE compliance with the regulation, including through a revised ratings framework and higher expectations for impactful plans. Revised Guidance.

Fannie Mae and Freddie Mac Publish Joint Enterprise Credit Score Solicitation

 

On February 18, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the “Enterprises”) have published a Joint Credit Score Solicitation, which describes the process for credit score model developers to submit applications to the Enterprises. The publication of the solicitation in the process of evaluating new credit score models will ensure that the Enterprises validate and approve credit score models in a timely and prudent manner. Release.

Changes Proposed to CAS and STACR Programs

 

On May 8, 2017, Fannie Mae and Freddie Mac announced that they are considering certain changes to the structure of their CAS and STACR note programs in order to widen the investor base for the notes through which they transfer credit risk to the private sector. The proposed changes to CAS and STACR will also require certain changes to the tax structure of Fannie and Freddie MBS issuances. The intention is, despite the changes to the MBS tax structure, to preserve TBA eligibility of the MBS.

As proposed, a REMIC tax election will be made on mortgage loans purchased by Fannie and Freddie and put into their MBS. As a result, the MBS would, for tax purposes, represent ownership interests in REMIC regular interests rather than in mortgage loans. The CAS/STACR notes would also represent ownership of REMIC regular interests issued by new CAS/STACR trusts, which will make the CAS and STACR notes more attractive to REITs and foreign investors. The new structure would also eliminate Fannie and Freddie counterparty risk in the credit risk transfer programs.

Fact Sheets and FAQs are linked to the Press Releases. Press Release (Fannie). Press Release (Freddie).

FHFA Issues Proposed Rule on Fannie Mae and Freddie Mac Duty to Serve Underserved Markets

On December 15, 2015, the Federal Housing Finance Agency issued a proposed rule that would require Fannie Mae and Freddie Mac to provide specific services relating to manufactured housing, affordable housing preservation and rural markets.  The proposed rule would also require Fannie Mae and Freddie Mac to address financing concerns in very low- to moderate-income families in those areas. Press release.

FHFA Report Details Progress on the 2014 Strategic Plan for Fannie Mae and Freddie Mac Conservatorships

On March 16, the  FHFA issued a Progress Report on the initiatives outlined in the 2014 Strategic Plan for the Conservatorships of Fannie Mae and Freddie Mac and the 2014 Conservatorship Scorecard.  The Progress Report describes activities Fannie Mae and Freddie Mac undertook in 2014 to further FHFA’s conservatorship goals: Maintain, Reduce, and BuildReleaseReport.