Federal Register - March 5, 2021
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Source: Federal Register
Federal Register / Vol. 86, No. 42 / Friday, March 5, 2021 / Proposed Rules
Portfolio lending declined to 19.6
percent in the third quarter of 2020,
down from 33.3 percent in the third quarter of 2019, and private label
securitizations declined to 1 percent from 1.8 percent a year prior.
2. Servicing Market Impacts and Implications for Origination Markets
option to extend the forbearance period for an additional 180 days.
FHFA recently announced that borrowers with a mortgage backed by the GSEs may be eligible for two additional three-month forbearance extensions, for a total of up to 18
months of forbearance, for certain borrowers who began a COVID19
forbearance on or before February 28, 2021. On February 16, 2021, FHA, VA, and USDA also provided up to six months of additional mortgage forbearance, in three-month increments, for borrowers who entered forbearance on or before June 30, 2020. FHA, VA, and USDA also extended the foreclosure moratorium on government-insured and guaranteed loans until June 30, 2021, from the previous expiration date of March 31, 2021, and the GSEs announced a similar extension on February 25, 2021.47 The government
agencies also announced an extension in the forbearance enrollment window until June 30, 2021, to provide additional time for borrowers to request a COVID19 forbearance. FHFA has not yet announced a deadline for borrowers with mortgages backed by the GSEs to enroll in a COVID19 forbearance plan.
Following the passage of the CARES
Act, some mortgage servicers remain obligated to make some principal and interest payments to investors in GSE
and Ginnie Mae securities, even if consumers are not making payments.48
In addition to the direct impact on origination volume and composition, the pandemics impact on the mortgage servicing market has downstream effects on mortgage originations as many of the same entities both originate and service mortgages. Anticipating that a number of homeowners would struggle to pay their mortgages due to the pandemic and related economic impacts, Congress passed and the President signed into law the Coronavirus Aid, Relief, and Economic Security Act CARES Act 46
in March 2020. The CARES Act provides certain protections for borrowers with federally backed mortgages, such as those whose mortgages are purchased or securitized by a GSE or insured or guaranteed by the FHA, VA, or U.S. Department of Agriculture USDA. The CARES Act mandated a 60-day foreclosure moratorium for such mortgages and allowed borrowers to request up to 180
days of forbearance due to a COVID19related financial hardship, with an 46 Public
Law 116136, 134 Stat. 281 2020.
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47 Press Release, The White House, Fact Sheet:
Biden Administration Announces Extension of COVID19 Forbearance and Foreclosure Protections for Homeowners Feb. 16, 2021, https
www.whitehouse.gov/briefing-room/statementsreleases/2021/02/16/fact-sheet-bidenadministration-announces-extension-of-covid-19forbearance-and-foreclosure-protections-forhomeowners/. See also Press Release, Fed. Hous.
Fin. Agency, FHFA Extends COVID19 Forbearance
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Period and Foreclosure and REO Eviction Moratoriums Feb. 25, 2021, https www.fhfa.gov/
Media/PublicAffairs/Pages/FHFA-Extends-COVID19-Forbearance-Period-and-Foreclosure-and-REOEviction-Moratoriums.aspx.
48 The GSEs typically repurchase loans out of the trust after they fall 120 days delinquent, after which the servicer is no longer required to advance principal and interest, but Ginnie Mae requires servicers to advance principal and interest until the default is resolved. On April 21, 2020, the FHFA
confirmed that servicers of GSE loans will only be required to advance four months of mortgage payments, regardless of whether the GSEs repurchase the loans from the trust after 120 days of delinquency. Fed. Hous. Fin. Agency, FHFA
Addresses Servicer Liquidity Concerns, Announces Four Month Advance Obligation Limit for Loans in Forbearance Apr. 21, 2020, https www.fhfa.gov/
Media/PublicAffairs/Pages/FHFA-AddressesServicer-Liquidity-Concerns-Announces-Four-
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