The Federal Housing Finance Agency (FHFA) today authorized Fannie Mae and Freddie Mac to enter into additional dollar roll transactions
to boost liquidity in the mortgage market. Dollar roll transactions provide mortgage-backed securities investors with short-term financing of their positions, providing liquidity to these investors.
The FHFA also announced
it is directing Fannie Mae and Freddie Mac to "provide alternative flexibilities" to satisfy appraisal and employment verification requirements through May 17, 2020.
FHFA said it would allow Fannie and Freddie to "use appraisal alternatives to reduce the need for appraisers to inspect the interior of a home for eligible mortgages."
In addition, in the event lenders cannot obtain verbal verification of the borrower's employment before loan closing, Fannie and Freddie will allow lenders to obtain verification via an e-mail from the employer, a recent year-to-date paystub from the borrower, or a bank statement showing a recent payroll deposit.
These are the latest actions that FHFA has taken to ensure Fannie Mae and Freddie Mac fulfill their mission of providing market liquidity during the coronavirus national emergency. Other actions include a suspension of foreclosures and evictions for at least 60 days and offering forbearance for borrowers facing hardship due to coronavirus.
FHFA said that, along with Fannie and Freddie, it continues to monitor how the coronavirus pandemic is affecting the housing market and "will continue to update our policies when necessary."