We are currently witnessing a global economic slowdown due to the COVID-19 outbreak, and most economists are projecting a severe pandemic-driven recession. In response to the outbreak, the Federal Government has undertaken countermeasures including a massive fiscal stimulus, making the economic effect difficult to predict.
The recently enacted Coronavirus Aid, Relief, and Economic Security (“CARES”) Act provided an estimated $2.2 trillion in relief. The Federal Reserve has lowered interest rates to near zero.
At the same time, under the CARES Act, FNMA, FHLMC, the FHA and the VA began offering COVID-19 forbearance programs. These programs provide six months of forbearance to borrowers adversely affected by the virus and include the option for the borrower to request an additional six months at a later date.
While the CARES act does not directly affect the FHLBanks’ Mortgage Partnership Finance (MPF)® Traditional Conventional loan products, it does apply to government loans and loans owned by Fannie Mae.