Fannie Mae Announces Payment Deferral Workout Option
Today, Fannie Mae released Lender Letter (LL-2020-05), Payment Deferrals, to its single-family servicers introducing a new home retention workout option jointly developed with Freddie Mac at the direction of the Federal Housing Finance Agency. This workout option enables servicers to assist eligible borrowers who have resolved a temporary hardship and resumed their monthly contractual payments but cannot afford either a full reinstatement or repayment plan to bring the loan current.
The Lender Letter covers the following requirements for the payment deferral:
- Determining eligibility for a payment deferral
- Determining eligibility for a payment deferral for a Texas Section 50(a)(6) loan
- Determining the payment deferral terms
- Completing a payment deferral
- Processing a payment deferral for an MBS mortgage loan
- Processing a payment deferral for a mortgage loan with mortgage insurance
- Handling fees and late charges in connection with a payment deferral
- Incentive fees
- Servicing fees for a payment deferral
- Requesting reimbursement for payment deferral expenses
- Fannie Mae workout hierarchy
- Updates to Fannie Mae Flex Modification
- Reporting responsibilities for payment deferral
- Borrower Solicitation Letter (Form 745)
Servicers are encouraged to begin evaluating borrowers for payment deferral in accordance with this Lender Letter on or after Jul. 1, 2020; however, servicers must begin evaluating borrowers for payment deferral no later than Jan. 1, 2021.
Learn more about what Fannie Mae is doing in response to the COVID-19 emergency on the Our Approach page.