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As Americans seek mortgage relief in the wake of the coronavirus pandemic, NAFCU has shared concerns about increased forbearance requests negatively impacting credit unions and is working to obtain support from regulators. Yesterday, NAFCU Senior Regulatory Compliance Counsel Jennifer Aguilar attended a virtual Women in Housing Finance event on how lenders are serving mortgage customers in the midst of the coronavirus emergency and navigating the updated provisions provided by the CARES Act.

On the topic of offering forbearance, the webinar provided insights into the benefit of lenders communicating consistent information to borrowers about the forbearance program under the CARES Act, including outlining the repayment options that are available.

The CARES Act program allows borrowers to make a forbearance request to their mortgage servicer, affirm that they are experiencing a financial hardship during the coronavirus crisis, and in response mortgage servicers must provide a forbearance that allows borrowers to defer their mortgage payments up to 180 days with an option for an additional 180-day extension.

However, the CARES Act does not provide relief for mortgage lenders. NAFCU President and CEO Dan Berger raised concerns to the Federal Housing Finance Agency Director Dr. Mark Calabria about the consequences of these forbearances on credit unions.

Berger flagged that credit unions are uniquely limited in sources of regulatory capital, which means a large increase in the number of forbearance requests due to the number of borrowers affected by the coronavirus “could significantly strain credit unions’ liquidity needs.” Ginnie Mae has provided some relief to mortgage servicers on this issue, but the FHFA does not currently plan to provide similar relief.

Yesterday, Fannie Mae and Freddie Mac provided additional clarity on the topic of forbearance and payment deferrals at the direction of the FHFA; all FHFA announcements related to coronavirus efforts can be found here. NAFCU will continue to advocate for protection and relief for credit union mortgage lenders facing an increase in forbearance requests.

For more on helping borrowers, several recent Compliance Blog posts offer further information on open-end and closed-end credit, forbearance agreements and credit reporting under the CARES Act. The association’s Compliance Team is publishing new posts daily, Monday-Friday, to keep credit unions informed of important regulatory updates during the pandemic.

 Access of all NAFCU's coronavirus resources here.