Mortgage ‘Flexibilities’ Extended to May – but Likely Last Time
FHFA extended mortgage-approval changes added during the pandemic – such as alternatives to appraisals and alternate methods to verify income and employment – through April 30. But the agency said that’s likely the last time it will do so, at least for some of the temporary easements.
The Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac will extend temporary loan origination flexibilities it created during the pandemic until April 30, 2021. These temporary “flexibilities” were less stringent mortgage approval policies that FHFA created in the early days of the COVID-19 shutdown as a way to keep supporting borrowers.
Before this week’s announcement, the temporary flexibilities were to expire on March 31, 2021.
Temporary flexibilities extended through April include:
Alternative appraisals on purchase and rate term refinance loans
Alternative methods for documenting income and verifying employment before loan closing
Expanding the use of power of attorney to assist with loan closings
FHFA cites a few examples of the flexibilities it says will likely go away after April 30. Those include:
Employment verification
Condominium project reviews
Expanded power of attorney
FHFA also left itself an out, saying it will actively “monitor mortgage market participants’ use of all temporary measures and retire those that are no longer needed or not extensively used” as health and safety conditions improve.
As a result of that monitoring, FHFA says it may extend or sunset its policies based on updated data and health risks. Homeowners and renters can visit consumerfinance.gov/housing for updated information on their relief options, protections and key deadlines.