Major mortgage companies Fannie Mae and Freddie Mac have recently announced relief from enforcement for certain mortgages that were previously or are currently under COVID-19 forbearance, according to Weiner Brodsky Kider PC.
This policy change was outlined in Freddie Mac’s Bulletin 2023-21 and Fannie Mae’s Lender Letter LL-2023-08, effective as of October 18, 2023. It pertains to specific breaches of underwriting and eligibility representations and warranties. This enforcement relief is available to the single-family sellers of Fannie Mae and Freddie Mac for loans that meet the requirements.
Generally, the prerequisites for eligibility are parallel to those previously established, indicating a degree of consistency in the policy decision. While the exact implications of this announcement are complex and still unfolding, simplistically, it forefronts the ongoing impacts of the COVID-19 pandemic on several aspects of the housing market, particularly where financing is involved.
The combined influence of Fannie Mae and Freddie Mac in the mortgage industry places a substantial weight onto this decision, potentially affecting a vast number of consumers and lenders alike. Legal professionals, particularly those in real estate and housing law, may find it worthwhile to monitor the effects of this decision in the coming months.