May 20, 2020
In two separate announcements, the Federal Housing Finance Agency (FHFA) and the U.S. Department of Housing and Urban Development (HUD) both unveiled plans requiring servicers to provide additional options to consumers in the wake of COVID-19. On May 13, 2020, the FHFA announced that servicers of Fannie Mae and Freddie Mac consumer loans must provide additional options for consumers to repay the up-to twelve-month forbearances already made available to soften the blow of COVID-19. Fannie Mae’s announcement and Freddie Mac’s Bulletin 2020-15 state that servicers of consumer mortgage loans guaranteed by these entities will be required to offer consumers granted coronavirus-related forbearances the opportunity to defer these payments. According to the guidance, the payments may be deferred until the borrower sells the property, refinances the mortgage, or the mortgage matures. Most notably, these deferred payments cannot accrue any additional interest or late fees.
The day after FHFA’s guidance was issued, HUD announced that the previously-enacted moratorium on foreclosures and evictions for FHA-insured Title II Single Family forward and Home Equity Conversion (reverse) mortgages will be extended. As discussed in a previous post, HUD’s Mortgagee Letter 2020-04 initially announced a moratorium on foreclosures and evictions that would extend for sixty days from March 18, 2020. Mortgagee Letter 2020-13 has extended this moratorium until at least June 30, 2020.
While this article is not intended to provide legal advice, the authors are available for retention to assist with an in-depth analysis regarding compliance with this new and evolving guidance.
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