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RI Mortgage Bankers Association Issues Appeal to Federal Housing Finance Agency for Additional Support in Wake of COVID-19
Warwick, R.I. (April 29, 2020) — In response to the Federal Housing Finance Agency’s (FHFA) announcement of “temporary flexibility” in appraisal and mortgage verifications, Rhode Island Mortgage Bankers Association (RIMBA) believes more needs to be done. RIMBA is asking FHFA to reconsider three key policies currently impacting consumers seeking mortgage refinances or forbearances.
“We appreciate the leadership of FHFA during this time, but we strongly believe more needs to be done to address the current situation,” said Patrick Deady, President of RIMBA. “There are currently a number of new COVID-19 guidelines for both origination and servicing that fall short of what the market requires.”
The three issues in question concern the following:
- Interior appraisal inspection relief: To eliminate the need for in-person contact, RIMBA would like to expand the use of desktop appraisals or exterior-only appraisals for all refinances and/or allow appraisers to use technology for obtaining interior inspections in alternative ways.
- Failure to Purchase Closed Loans: If a borrower’s employment circumstances change due to COVID-19, and they apply for a forbearance, Fannie Mae and Freddie Mac will refuse to purchase the loan. RIMBA is asking Fannie Mae and Freddie Mac to honor purchase commitments for mortgages of consumers experiencing financial distress due to COVID-19 after loan closing who have applied for a forbearance.
- Additional Liquidity Needed: Widespread borrower forbearance will create a severe liquidity shortage that will plummet the housing finance system into disarray. This will especially affect mortgage servicers, who are contractually bound to continue to advance monthly payments. RIMBA supports the Federal Reserve using its authority under Section 13(3) of the Federal Reserve Act to provide liquidity for the residential and commercial mortgage servicing sector.
“FHFA, Fannie Mae, and Freddie Mac need to take responsibility and help consumers, mortgage lenders and servicers now,” said Thomas Fleming, Executive Vice President of RIMBA. “We are asking them to please do the right thing and reconsider the policies and guidelines that they have implemented regarding appraisals and liquidity.”
About Rhode Island Mortgage Bankers Association
The Rhode Island Mortgage Bankers Association is dedicated to promoting and sustaining responsible home lending in Rhode Island. The mortgage association has over 90 corporate members, which represent thousands of mortgage lenders throughout the state who help businesses and people secure mortgages. As part of its overarching plan to create a better housing market, RIMBA regularly promotes educational initiatives, addresses legislative challenges, and strives to cultivate membership growth. For more information about RIMBA, visit: rimba.org.