President Trump urges Fannie Mae and Freddie Mac to promote large-scale homebuilders to boost housing development

President Trump urges Fannie Mae and Freddie Mac to promote large-scale homebuilders to boost housing development

In response to the ongoing government shutdown, Fannie Mae and Freddie Mac have issued guidance to mortgage lenders and servicers, waiving certain requirements to facilitate loan processing. The shutdown, which affects federal employees and services, has led to challenges in verifying income, reserves, tax, and Social Security information from borrowers .

Fannie Mae and Freddie Mac have extended the typical 30-day limit for paystubs to the most recent year-to-date earnings statement prior to the shutdown. They have also allowed lenders to waive verification of employment if they can document their efforts and confirm the borrower is employed. However, they have noted that the shutdown does not relieve lenders of obligations under laws such as the "ability to repay" standards in the Truth in Lending Act .

On the servicing side, Freddie Mac and Fannie Mae have noted that servicers may offer forbearance to borrowers impacted by the shutdown .

Meanwhile, President Trump has urged Fannie Mae and Freddie Mac to promote large-scale homebuilders to boost housing development. In a recent statement, Trump emphasized the need to increase housing supply to address affordability issues and support economic growth. However, the effectiveness of such a policy remains to be seen .

The Federal Housing Administration (FHA) will continue to endorse loans under its current multi-year loan guarantee commitment authority, with the exception of certain types of loans to HUD employees. Ginnie Mae will also continue to perform all functions necessary to ensure the market is not disrupted during the shutdown .

As the shutdown continues, the impact on the housing market remains to be seen. The waived requirements and continued endorsements by FHA and Ginnie Mae aim to maintain stability in the mortgage market. However, the long-term effects of the shutdown and any changes in policy following Trump's urging remain uncertain.