WARWICK, R.I., May 4, 2020 /PRNewswire-PRWeb/ -- In
response to the Federal Housing Finance Agency's (FHFA)
announcement of "temporary flexibility" in appraisal and mortgage
verifications, Rhode Island Mortgage Bankers Association (RIMBA)
believes more needs to be done. RIMBA is asking FHFA to reconsider
three key policies currently impacting consumers seeking mortgage
refinances or forbearances.
"We appreciate the leadership of FHFA during this time, but we
strongly believe more needs to be done to address the current
situation," said Patrick Deady,
President of RIMBA. "There are currently a number of new COVID-19
guidelines for both origination and servicing that fall short of
what the market requires."
The three issues in question concern the following:
Interior appraisal inspection relief: To eliminate the need for
in-person contact, RIMBA would like to expand the use of desktop
appraisals or exterior-only appraisals for all refinances and/or
allow appraisers to use technology for obtaining interior
inspections in alternative ways.
Failure to Purchase Closed Loans: If a borrower's employment
circumstances change due to COVID-19, and they apply for a
forbearance, Fannie Mae and Freddie Mac will refuse to purchase the
loan. RIMBA is asking Fannie Mae and Freddie Mac to honor purchase
commitments for mortgages of consumers experiencing financial
distress due to COVID-19 after loan closing who have applied for a
forbearance.
Additional Liquidity Needed: Widespread borrower forbearance
will create a severe liquidity shortage that will plummet the
housing finance system into disarray. This will especially affect
mortgage servicers, who are contractually bound to continue to
advance monthly payments. RIMBA supports the Federal Reserve using
its authority under Section 13(3) of the Federal Reserve Act to
provide liquidity for the residential and commercial mortgage
servicing sector.
"FHFA, Fannie Mae, and Freddie Mac need to take responsibility
and help consumers, mortgage lenders and servicers now," said
Thomas Fleming, Executive Vice
President of RIMBA. "We are asking them to please do the right
thing and reconsider the policies and guidelines that they have
implemented regarding appraisals and liquidity."
About Rhode Island Mortgage Bankers Association
The Rhode Island Mortgage Bankers Association is dedicated to
promoting and sustaining responsible home lending in Rhode Island. The mortgage association has
over 90 corporate members, which represent thousands of mortgage
lenders throughout the state who help businesses and people secure
mortgages. As part of its overarching plan to create a better
housing market, RIMBA regularly promotes educational initiatives,
addresses legislative challenges, and strives to cultivate
membership growth. For more information about RIMBA, visit:
rimba.org.
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SOURCE Rhode Island Mortgage Bankers Association