The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress in March requires mortgage servicers to offer forbearance to homeowners who experienced a loss of income due to the COVID-19 pandemic.

Almost 6% of all mortgages in the United States were in forbearance as of early April, according to the Mortgage Bankers Association, which meant about 3 million Americans didn’t make their monthly payment.

The CARES Act, however, didn’t include any funding for servicers, who were still on the hook for payments to the investors who own their loans for at least four months.

Fannie Mae and Freddie Mac to the rescue — sort of.

Late last month, the Federal Housing finance Agency (FHFA) announced that the government-sponsored enterprises (GSEs) can buy loans that go into forbearance within their first month. Under normal circumstances, delinquent mortgages and loans that are in forbearance are not eligible for purchase by the GSEs.

“We are focused on keeping the mortgage market working for current and future homeowners during these challenging times,” said FHFA Director Mark Calabria. “Purchases of these previously ineligible loans will help provide liquidity to mortgage markets and allow originators to keep lending.”

The policy only applies to mortgages with closing dates between February 1 and May 31, 2020 and settlement dates on or after May 1, 2020.

And there’s a catch.

The GSEs will charge lenders a fee of 5% for loans where the borrower is a first-time homebuyer and 7% for all others.

That means, for example, a first-time buyer’s loan of $245,320 (the average first-time purchase amount, according to Urban Institute), will cost the lender $12,266 to sell to a GSE.

Community Home Lenders Association Executive Director Scott Olson called the fees punitive.

“The response … in the wake of the COVID-19 crisis is totally inadequate,” he said. Instead of providing a lifeline to conventional lenders and the borrowers they serve — as Congress and the Administration have done for almost all other sectors of the economy — today's announcement amounts to little more than a GSE willingness to be a lender of last resort, a player in the scratch-and-dent market.

“Some party — either Fannie Mae and Freddie Mac or Congress — should step up and support properly underwritten loans where the borrower then loses their job,” Olson said. “And if they fail to do so, the conventional loan market will suffer until the coronavirus crisis is over.”

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