Rep. Cleaver Applauds FHFA Reversal Following Push From Lawmakers
Statement
The Federal Housing Finance Agency (FHFA) announced it would offer cash-strapped mortgage servicers much-needed financial relief by limiting the obligations servicers must pay to Fannie Mae and Freddie Mac on missed payments from single-family loans. Additionally, the FHFA announced they would support homeowners and mortgage lenders by also approving the purchase of single-family mortgages in forbearance that meet specific eligibility criteria. The FHFA's reversal comes following calls to support mortgage servicers from United States Representatives Emanuel Cleaver, II (D-MO) Wm. Lacy Clay (D-MO), Brad Sherman (D-CA), Al Green (D-TX), Joyce Beatty (D-OH), and Gregory Meeks (D-NY). These changes will allow families in need to take advantage of mortgage forbearance while preserving the stability of our housing market.
"This is a critical win for homeowners across the nation," said Congressman Cleaver. "By providing relief to servicers that originate 60% of America's mortgages and hold over half of them, the FHFA is protecting American borrowers from having to bear the cost of a possible failure at a time when most American families are just trying to stay afloat. I am pleased to see the FHFA come to their senses, and I want to thank Congressman Clay, as Chairman of the Subcommittee on Housing, for his immediate efforts to address this untenable situation."
In a letter to FHFA Director Mark Calabria last week, following public statements denouncing relief for servicers from the Director, the lawmakers urged Director Calabria to change course and give mortgage servicers, who process millions of mortgage payments every month, urgently need relief.
In the letter, the lawmakers wrote:
"We are concerned that your comments inappropriately undermine the gravity of the situation at hand, and that FHFA's response would ultimately cause significant market disruption and harm to borrowers as we have seen historically when servicing rights were transferred in the aftermath of the 2008 crisis."
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