Posted To: MND NewsWire

The Federal Housing Finance Agency (FHFA) has clarified the obligations of Fannie Mae and Freddie Mac’s (the GSEs’) servicers to investors during the COVID-19 crisis. Servicers have been told to extend forbearance to homeowners who are experiencing financial distress as the result of the pandemic and, as of last Friday, approximately 5 percent of GSE loans had entered forbearance agreements. Servicers are contractually required to forward monthly principal and interest payments to mortgage-backed security (MBS) investors even when homeowners are not making payments on the underlying loans. While servicers maintain reserves for this purpose, it has been feared that the expected high utilization of forbearances may become an unmanageable burden, especially for smaller companies. Today’s information…(read more)

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Source: Mortgage News Daily