A Borrower Protection Program involving the interagency sharing of mortgage servicing information during the coronavirus (COVID-19) national emergency was announced Wednesday by the Consumer Financial Protection Bureau (CFPB) and the Federal Housing Finance Agency (FHFA), the agency that oversees the federal, housing-related government-sponsored enterprises (GSEs).
Under the program, the agencies said, the CFPB will make complaint information and analytical tools available to FHFA via a secure electronic interface; and FHFA will make available to the CFPB information about forbearances, modifications and other loss mitigation initiatives undertaken by the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corp. (Freddie Mac).
In response to the COVID-19 national emergency, Fannie and Freddie permitted borrowers with a financial hardship due to the pandemic the ability to enter into forbearance, a pause or reduction in their monthly mortgage. The missed payments will have to be paid back by the borrower.
The agencies explained that mortgage servicers are responsible for working with borrowers to set up a repayment plan that works for both parties. The missed payments can be added to the normal monthly payments, paid back all at once, tacked on to the end of the loan, or the borrower can have the term of the loan extended.
“Through the partnership being announced today, the Bureau will share our insights with FHFA and ensure we get their data on how mortgage servicers are working with their customers during this critical time and going forward,” said CFPB Director Kathleen L. Kraninger.
“Borrowers are entitled to accurate information about their forbearance options. This partnership with CFPB ensures FHFA can address misconceptions stemming from consumer complaints by working with Fannie and Freddie servicers,” said FHFA Mark Calabria.