Investors are offering their own relief options. Institutions must refer to the applicable secondary market investor guidelines.
Note that under the CARES Act, section 4022 requires that, for Federally-backed mortgage loans (loans insured or guaranteed by certain U.S. government agencies and programs, as well as loans made by the Department of Agriculture and loans sold to or securitized by Fannie Mae or Freddie Mac), a borrower experiencing financial hardship may request and be granted with a forbearance. See CARES Act section in this issue for more information.
Under Fannie Mae’s guidelines for single-family mortgages, homeowners who are adversely impacted by the national emergency may request mortgage assistance by contacting their mortgage servicer and are eligible for a forbearance plan to reduce or suspend their mortgage payments for up to 12 months and will not incur late fees. After forbearance, a servicer must work with the borrower on a permanent plan to help maintain or reduce monthly payment amounts as necessary, including a loan modification.
Foreclosure sales and evictions of borrowers are suspended for 60 days. Credit bureau reporting of past due payments of borrowers in a forbearance plan as a result of hardships attributable to this national emergency is suspended.
See https://singlefamily.fanniemae.com/media/22341/display for Lender Letter 2020-05.
Under Freddie Mac’s guidelines, loan servicers are directed to provide mortgage relief options that include ensuring payment relief by providing forbearance for up to 12 months and waiving assessments of penalties or late fees. Foreclosure sales and evictions of borrowers living in homes owned by Freddie Mac are suspended until at least May 17, 2020. Institutions must suspend reporting to credit bureaus of past due payments of borrowers who are in a forbearance plan as a result of hardships attributable to this national emergency. Finally, there are loan modification options to provide mortgage payment relief or keep those payments the same after the forbearance period.
See Freddie Mac Bulletin 2020- 6, available at: https://guide.freddiemac.com/app/guide/bulletin/2020-6.
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