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The Federal Housing Finance Agency <\/strong>(FHFA<\/a>) announced on Monday morning that it will treat, in some aspects, loans<\/a> in COVID-19 forbearance similar to those in natural disaster forbearance. <\/p>\n The change, to be implemented on Oct. 31, means pandemic-related forbearance mortgages will remain eligible to certain rep and warrant relief based on the borrowers’ payment history for three years. <\/p>\n In practice, the borrower’s time in forbearance will be included when demonstrating a satisfactory payment history in the first 36 months following origination. <\/p>\n “I am announcing today that we have directed the Enterprises to extend their rep & warrant policies for loans affected by natural disasters to cover mortgages that have successfully exited a COVID-19 forbearance plan,” FHFA director Sandra Thompson<\/a> said during the MBA Annual 2023, a conference held Oct. 14-17 in Philadelphia. <\/p>\n “Now, loans that are eligible for repurchase relief after three years will not lose this relief due to a COVID-19 forbearance. Similar to the Enterprises’ natural disaster policies, missed payments during the COVID-19 forbearance will not cause a loan to lose eligibility for the 3-year rep & warrant sunset.” <\/p>\n The FHFA understands that forbearance was an “invaluable” tool during the COVID-19 pandemic, and the loans serviced “should not be subject to greater repurchase risk simply because a borrower was impacted by the pandemic,” according to Thompson. <\/p>\n In reaction to the announcement, Bob Broeksmit, president and CEO of the\u00a0Mortgage Bankers Association<\/strong>\u00a0(MBA), said that “FHFA’s policy change to provide rep and warrant relief for performing seasoned loans that have successfully exited COVID-19 forbearance plans is a longstanding recommendation that we are pleased to see implemented.”<\/p>\nBi-merge, appraisal udates<\/h2>\n