Fannie Mae is now estimating that 15% of their mortgages will enter into forbearance. Earlier on they predicted that just 4% would enter forbearance and FHFA Director Mark Calabria famously said early on the forbearance rate wouldn’t be > 1%. 

We also learned that in Fannie Mae’s Master Service Agreement as it currently reads that AFTER a borrower gets their loan current after forbearance, having made up their missed payments in forbearance, they MUST MAKE 12 MONTHS OF ON-TIME MORTGAGE PAYMENTS TO GET A NEW MORTGAGE FROM FANNIE OR FREDDIE!!!

So, if a borrower doesn’t make up their missed payments right away their timeline to get a new mortgage from Fannie and Freddie will be extended. For example, they choose to add the missing payments to the end of their mortgage it appears they will NOT BE ELIGIBLE FOR A LOAN FROM FANNIE OR FREDDIE. 

This was confirmed by an email I received from MGIC, one of the large PMI companies. Until your loan is brought current and you have made 12 consecutive on-time payments your loan will have a SCARLET LETTER against it. Thus, people will NOT be able to refinance or buy a new home using a conventional loan from Fannie or Freddie for considerable time after forbearance. I expect jumbo loans will be much worse.