Fannie Mae Introduces Disaster Payment Deferral and Updates Five Lender Letters
Today, Fannie Mae released Lender Letter LL- 2020-11, Disaster Payment Deferral to its single-family servicers. With this Lender Letter, Fannie Mae is introducing disaster payment deferral, a new retention workout option created to assist borrowers with a disaster-related hardship to return their mortgage to a current status after up to 12 months of missed payments.
Fannie Mae also published a July Servicing Guide Update (SVC-2020-03), including revisions to post-disaster credit reporting requirements, among other updates.
In addition, five Lender Letters have been updated:
- LL-2020-02, Impact of COVID-19 on Servicing, provides servicers with additional information related to disbursing insurance loss proceeds for borrowers impacted by COVID-19 and the impact of COVID-19 on Fannie Mae Home Affordable Modification Program (HAMP) "Pay for Performance" incentives.
- LL-2020-05, Payment Deferral, clarifies how servicing fees, guaranty fees, and excess servicing fees (if applicable) will be reimbursed for mortgage loans that receive a disaster payment deferral.
- LL-2020-07, COVID-19 Payment Deferral, updates the requirements for repayment of any escrow shortage amount and clarifies how servicing fees, guaranty fees, and excess servicing fees (if applicable) will be reimbursed for mortgage loans that receive a disaster payment deferral.
- LL-2020-08, Changes to Servicer Principal and Interest Advance Requirements, provides additional procedural instructions to servicers.
- LL-2020-09, Incentive Fees for Retention Workout Options, revises the retention workout option incentive fee table to incorporate the incentive fee for a disaster payment deferral.
For additional details view the Lender Letters or visit our COVID-19 Investor Resources webpage.