Denied refinancing after forbearance

[Pedro Florentino]

I recently applied for a cash out refinance with Aimloan for an investment property currently serviced by Aimloan.  Back in May 2020 I requested a forbearance due to financial hardship associated with lost rents.  I restarted payments in September and after 4 consecutive months of on time payments I requested a refinance.  We got to the last mile of the refinance process and was notified that because I took a forbearance I was not eligible and that I need to have 12 monthly payments in order to qualify.  Considering that my loan is backed by Freddie Mac and if covered on the federal guidelines which state, 3 months of on time payments I found it contradicting to federal guidelines.  Is Aimloan violating federal guidelines by denying my loan based on me accepting a forbearance? I like to hear your feedback.  Thanks

[Russell Brazil]

A lender can use more restrictive guidelines than Fannie/Freddie.  A loan just needs to meet those minimum guidelines for them to be able to sell the loan on the secondary market.

By requesting forbearance, you have become a higher risk borrower. Forbearance during covid will not have affected your credit, but it will impact your ability to borrow.