In his latest blog, “How Past Challenges Made Housing Ready for COVIDFannie Mae Chairman David Benson notes that he’s encouraged by the response to date from lenders, service providers and the marketplace, but knows there’s a lot of work to be done.
Fannie Mae was born out of the Great Depression over 80 years ago, and one of her main responsibilities was to stabilize the housing and mortgage markets in times of crisis. The challenges posed by COVID-19 test this responsibility.
Benson notes that the industry has done three main things in response to the pandemic:
- Acted quickly and urgently
- Public-private coordination
- Strengthening of information and awareness-raising efforts
“We knew that to support homeowners, tenants and the market in general, speed and agility were needed,” said Benson. “In fact, the need for action was even more urgent than in 2008, when COVID-19 engulfed the entire economy in just a matter of weeks, affecting millions of families at once, rather than spilling over into different sectors over several years. “
Industry investment in digital capabilities has enabled larger scale interventions such as desktop appraisals, remote notarization, and electronic signature of loan documents. This meant that people could still close their mortgages and the housing finance system could continue to function properly.
And since the adoption of technology was a means of speed and precision, the regulatory aspect of the industry had to be taken into account as well.
“This meant close coordination with industry stakeholders, in particular the Federal Housing Finance Agency (FHFA), our regulator and curator,” Benson said. “During the first weeks of the national emergency, we quickly put in place new policies related to mortgage default, tolerance, foreclosures and evictions, a process that began even before the enactment of the CARES law. . “
A nation caught off guard by the pandemic has left countless homeowners in a state of flux about their finances and what could be done to ease the stress of that burden. This responsibility fell on the shoulders of the industry, as they had to educate and guide Americans through this new standard.
“Another thing we learned from the last crisis is that accurate information and awareness is essential to help distressed borrowers and tenants,” said Benson. “Developing new solutions to help landlords and tenants doesn’t really matter if you don’t have a way to introduce them to the tools. We are continually looking for new ways to ensure that as many borrowers and tenants who need help as possible take advantage of the relief options available to them.
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