Lenders initially won't be able to pass on the cost of the Federal Housing Finance Agency's "adverse market fee" to borrowers whose rates on GSE-backed mortgages and refinances are already locked in.
The bureau said it began developing the standards before the coronavirus pandemic. But more transfers may occur as some servicers struggle to meet their obligations during the economic downturn.
The Federal Housing Administration has provided struggling homeowners with payment flexibility and explored other measures. At the same time, the agency is mindful of protecting itself against downside risks.
The policy move will allow small institutions participating in the Paycheck Protection Program to pledge business loans as collateral to obtain advances.
Efforts to calm lenders’ fears about coronavirus-related forbearance may not offset tightening standards, and the FHA is less likely to boost volume than it was during the financial crisis.
The Borrower Protection Program enables the two agencies to exchange information about loss mitigation efforts and consumer complaints regarding specific servicers.
Federal Housing Finance Agency Director Mark Calabria said a virus-induced financial crisis might give rise to more delinquencies and foreclosures than the 2007 subprime mortgage meltdown.
The ICBA chief’s plea for a six-month halt to regulations not related to the pandemic followed similar calls by community groups and a key Senate Democrat.
The impending wave of loan delinquencies because of the coronavirus hurt private mortgage insurer earnings, but the companies will still have sufficient capital, a Keefe, Bruyette & Woods report said.
Treasury Secretary Steven Mnuchin reiterated Thursday that he wants U.S. financial markets to remain open even as the coronavirus fuels wild volatility, while adding that he's focused on helping mortgage firms expected to be hit hard by the pandemic’s spreading economic pain.