The Federal Housing Finance Agency (FHFA) announced Wednesday that Fannie Mae and Freddie Mac will extend some temporary loan origination flexibilities until May 31, 2021. 

This extension from the flexibilities that were previously set to end on Apr. 30, 2021 after the FHFA’s last extension will be the final extension. The FHFA explained that as economy recovers, usage of these flexibilities has slowed, and that it expects to retire all temporary selling flexibilities on May 31, 2021. 

Alternative appraisals on purchase and rate-term refinance loans are among the flexibilities that will now be extended through May 31, 2021.

However, those temporary flexibilities related to employment verification, condominium project reviews, and expanded power of attorney are being allowed to expire at the end of this month as scheduled on Apr. 30, 2021.

“Throughout the COVID-19 pandemic, FHFA has actively monitored the pandemic’s impact on mortgage market participants’ use of the temporary selling policies,” the FHFA said in a statement. “Low usage of the flexibilities make the temporary flexibilities no longer mandatory to ensure efficient market function.”

Other government agencies have already ended their support of alternative appraisal flexibilities. The Consumer Financial Protection Bureau (CFPB) rescinded a series of flexible COVID-19 policies Wednesday, including its support of alternative appraisal options. 

“We are now over a year into the disruptive and deadly COVID-19 crisis,” CFPB Acting Director Dave Uejio said at the time. “The virus has affected industry as well as consumers, but individuals and families have been hardest-hit by the pandemic’s health and economic impacts. Providing regulatory flexibility to companies should not come at the expense of consumers. Because many financial institutions have developed more robust remote capabilities and demonstrated improved operations, it is no longer prudent to maintain these flexibilities. The CFPB’s first priority, today and always, is protecting consumers from harm.”

In the most recent employment report from the U.S. Department of Labor, the U.S. added 916,000 jobs in March on a seasonally adjusted basis, hitting its highest pace since August.

The share of mortgages in forbearance continues to retreat from last summer’s highs, but approximately 2.3 million homeowners are still taking a hiatus from their monthly mortgage payments, according to the latest numbers from the Mortgage Bankers Association (MBA).

Overall, the minutes from the Federal Reserve’s March Federal Open Markets Committee (FOMC) meeting showed there is an expectation for a stronger economic recovery in the months and years ahead. 

Email Kelsey Ramírez

mortgages
Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription