The Federal Housing Finance Administration (FHFA) should ensure there is consistency between the policies within their regulatory purview and the directives of Congress during the COVID-19 recovery, CUNA wrote Tuesday to the House Financial Services Committee. The committee is scheduled to hear testimony Wednesday from FHFA Director Mark Calabria on the agency’s response to the pandemic.

“Credit unions have encountered an increased number of distressed borrowers seeking forbearances or other assistance. As forbearance requests increase, so too do the questions surrounding the process and procedures,” the letter reads. “We call on Congress to urge the FHFA, Fannie and Freddie to issue clarifying guidance and additional resources regarding the treatment of escrow, private mortgage insurance (PMI), credit life, credit disability, and interest during the period of loan deferment and after the deferment concludes, FHFA and the GSEs could provide clarity on the timing of any required escrow analysis and the options for repayment of unpaid escrow.”

Additional highlights of the letter include:

• While CUNA supports initiatives to aid distressed borrowers, is it increasingly concerned with the impact of many forbearances on the liquidity of mortgage servicers. CUNA recommends policymakers act to provide a funding source accessible to mortgage servicers as the financial disruption becomes prolonged;
• CUNA fully supports the COVID-19 Homeowner Assistance Fund Act, which would provide $75 billion for states and territories to prevent mortgage defaults, foreclosures and displacements due to COVID-19 related hardships;
• CUNA opposes the COVID-19 Mortgage Relief Act (H.R. 6741), which expands CARES Act foreclosure and forbearance without providing liquidity assistance for lenders and servicers; and
• CUNA appreciates FHFA’s delay of the GSE refinance fee until Dec. 1 and the exemption for refinance loans with balances of less than $125,000 from the fee.