The StoneHill Group continually monitors the mortgage industry for changes that impact our clients. Here are the most recent Agency updates.
Origination Agency Updates Related to COVID-19
February 12, 2021
Freddie Mac Updates
Freddie Mac Announces Guide Bulletin 2021-7 (Extension of Temporary Flexibilities Related to COVID-19) (02/10/21)
SUBJECT: EXTENSION OF TEMPORARY FLEXIBILITIES RELATED TO COVID-19
Freddie Mac continues to work closely with Fannie Mae under the guidance and direction of the FHFA to address the ongoing economic implications and uncertainty related to the coronavirus disease (COVID-19) pandemic and its impacts on Borrowers and the Mortgage origination process.
In Bulletin 2021-1, we extended the effective date for some previously announced temporary flexibilities for Mortgages with Application Received Dates through February 28, 2021. We are further extending the effective date for Mortgages with Application Received Dates through March 31, 2021 for the following:
- Employed income – 10-day pre-closing verification flexibilities announced in Bulletin 2020-5
- Appraisal and GreenCHOICE Mortgage® flexibilities announced in Bulletins 2020-5, 2020-8 and 2020-11
- Condominium Project flexibilities announced in Bulletin 2020-11
- Power of attorney (POA) flexibilities announced in Bulletin 2020-8
Freddie Mac Selling FAQs related to COVID-19
FHA Issues Multiple COVID-19 Temporary Policy Waivers
Today, the Federal Housing Administration (FHA) announced several temporary provisions issued through policy waivers to help mitigate the impacts of the COVID-19 pandemic on borrowers with FHA-insured mortgages and mortgagees. These provisions are part of the Biden Administration’s ongoing efforts to provide economic relief in response to the coronavirus pandemic. The following waivers build upon previously issued waivers and will be effective through December 31, 2021:
- Regulatory and Handbook Waivers: Alternative Methods for Face-to-Face Interviews with Borrowers
- Temporary Partial Waiver of Mortgagee Letter (ML) 2017-05: Home Equity Conversion Mortgages (HECM) Claim Type 22 (CT-22) Assignment Requests
- Temporary Partial Waiver of ML 2015-11: Waive $5,000 Cap on Property Charge Repayment Plan.
Temporary Regulatory and Handbook Waivers: Alternative Methods for
Face-to-Face Interviews with Borrowers
The temporary Regulatory and Handbook waivers allow mortgagees to utilize alternative methods for conducting borrower interviews, which are used to gather and convey information to assess the borrower’s circumstances, and to determine appropriate repayment plans as part of the early default intervention requirements of FHA default servicing. These waivers are effective through December 31, 2021.
Temporary Partial Waiver of ML 2017-05: HECM Claim Type CT-22
This temporary partial waiver of ML 2017-05 allows mortgagees to submit a CT-22 Assignment Claim without having to obtain a signature from the HECM borrower on an occupancy certification. Mortgagees must continue to obtain the HECM borrower’s annual certification. This temporary waiver is effective through December 31, 2021.
Temporary Partial Waiver of ML 2015-11: Waive $5,000 Cap on
Property Charge Repayment Plan
This temporary partial waiver of ML 2015-11, allows mortgagees to offer a recalculated repayment plan for unpaid property charges to HECM borrowers regardless of the total outstanding arrearage following a failed repayment plan. This temporary partial waiver is effective through December 31, 2021.
Servicing Agency Updates Related to COVID-19
February 18, 2021
FHA INFO #21-09
FHA Extends its Foreclosure and Eviction Moratoria and Expands Temporary COVID-19 Forbearance and Servicing Polices to Provide Additional Homeowner Relief
Recognizing the financial and other hardships many individuals and families are facing due to the ongoing COVID-19 pandemic, the Federal Housing Administration (FHA) is expanding its relief efforts to assist homeowners with FHA-insured mortgages.
In today’s Mortgagee Letter (ML) 2021-05, Extensions of Single Family Foreclosure and Eviction Moratorium, Start Date of COVID-19 Initial Forbearance, and Home Equity Conversion Mortgage (HECM) Extension Period; Expansion of COVID-19 Loss Mitigation Options, FHA outlines multiple COVID-19 related policy extensions and expansions that are designed make it easier for mortgagees to provide FHA-insured homeowners with the assistance they need to retain their homes during these challenging times.
The updated guidance in this ML is effective immediately and applies to all FHA Title II Single Family programs. The ML:
- Extends the foreclosure and eviction moratoriums through June 30, 2021 and provides a 180-day extension to the deadlines for the first legal action and the reasonable diligence time frame from the date of the moratorium expiration.
- Extends the dates to request an initial COVID-19 Forbearance or a COVID-19 Home Equity Conversion Mortgage (HECM) extension period through June 30, 2021.
- Adds two COVID-19 Forbearance and COVID-19 HECM extension periods of up to three months each for borrowers who requested their initial COVID-19 Forbearance or COVID-19 HECM extension period on or before June 30, 2020, and are coming to the end of their 12-month period;
- Expands eligibility for the COVID-19 loss mitigation options for certain borrowers regardless of whether they received a COVID-19 Forbearance; and
- Eliminates the restriction on the number of permanent COVID-19 home retention options a borrower can receive.
For more information, read today’s Mortgagee Letter 2021-05 and Press Release.
In the coming days, FHA servicers and other interested parties will be able to access a pre-recorded webinar in which the various policy updates outlined in ML 2021-05 will be discussed in more detail. Viewing information and training materials will be available on the FHA Single Family Events and Training web page.
Webinar access information will be communicated through an FHA INFO when available.
FHA INFO #21-06
FHA Updates Its COVID-19 Forbearance Start Date and Home Equity Conversion Mortgage (HECM) Extension Period
The Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2021-04, Update to the COVID-19 Forbearance Start Date and the COVID-19 Home Equity Conversion Mortgage (HECM) Extension Period today.
Effective immediately, this ML extends through March 31, 2021, the deadline for single family borrowers with FHA-insured mortgages to request an initial COVID-19 forbearance from their mortgage servicer to defer or reduce their mortgage payments for up to six months. If needed, this forbearance can be extended for an additional six months. This ML also extends the deadline to request the initial extension period for HECM borrowers impacted by the COVID-19 pandemic.
The means of communication between a borrower and their mortgage servicer regarding a COVID-19 forbearance, and the terms of the COVID-19 forbearance, remain the same as established in ML 2020-06 and ML 2020-22.
CIRC. 26-21-04 Approving Forbearance Requests for Veterans Affected by COVID-19 (02/16/21)
Background and Purpose: Veterans who have recently begun experiencing financial hardships due to the pandemic are uncertain about forbearance options available to them. Many Veterans who requested forbearance early on and have or will soon be coming to the end of their forbearance periods, are also uncertain. This Circular provides guidance for granting COVID-19 forbearance to Veterans who continue experiencing financial hardships, directly or indirectly, because of the pandemic.
Action. Under this Circular, VA expects servicers to approve a Veteran’s request for COVID-19 forbearance, or continued forbearance, if a Veteran is experiencing a financial hardship, directly or indirectly, due to COVID- 19, and the hardship negatively affects the Veteran’s ability to make on-time loan payments. Veterans with VA-guaranteed loans may be eligible for COVID-19 forbearance, regardless of the delinquency status of the VA-guaranteed loan. The Veteran’s initial request for COVID-19 forbearance may be granted for up to six months. If needed by the Veteran, the Veteran may request, and VA expects the servicer to approve, additional COVID-19 forbearance for up to six months. Servicers may approve a Veteran’s initial COVID-19 forbearance if the request is made on or before June 30, 2021. A COVID-19 forbearance period may extend through June 30, 2022.
For Veterans who requested their initial COVID-19 forbearance on or before June 30, 2020, VA expects that, if needed, the Veteran may request, and the servicer will approve, up to two additional three-month COVID-19 forbearance periods, after twelve months of COVID-19 forbearance. The Veteran must request each three-month extension individually. Neither of the two additional three-month COVID-19 forbearance periods may extend beyond December 31, 2021.
Any period of COVID-19 forbearance may be shortened at the Veteran’s request.
The servicer should waive all late charges, fees, and penalties, if any, that might otherwise accrue because of payments missed during a COVID-19 forbearance.
The COVID-19 forbearance described in this guidance does not supersede or otherwise eliminate the special forbearance loss mitigation option defined in 38 C.F.R. § 36.4301.
Rescission: This Circular is rescinded July 1, 2022
USDA Extends Eviction and Foreclosure Moratorium, and Offers Guidance on Mortgage Forbearance Deadline
The purpose of this notice is to provide relief to and guidance for Single Family Housing Guaranteed Loan Program (SFHGLP) borrowers impacted by the COVID-19 pandemic.
Moratorium on Foreclosures and Evictions
The U.S. Department of Agriculture (USDA) Rural Development is extending its moratorium on foreclosures and evictions through June 30, 2021 for SFHGLP properties. After the moratorium ends, if the lender decides to proceed with foreclosure, the time for initiating or continuing foreclosure proceedings is extended from 90 days (as specified in 7 CFR 3555.307(a)) to 180 days. The moratorium does not apply in cases where the servicer has documented the property is vacant or abandoned.
For borrowers who request an initial forbearance on or before June 30, 2021, lenders are expected to grant payment forbearance based on a borrower’s attestation (verbal or written) to financial hardship caused by the COVID-19 emergency. The initial forbearance period may be up to 180 days and the borrower may request an extension of up to an additional 180 days.
Borrowers who received an initial CARES Act forbearance before June 30, 2020, may be granted up to two additional three-month payment forbearances. The borrower must request each extension individually.
The term of the initial forbearance and any extension may be shortened at the borrower’s request.
Fees, penalties, or interest (beyond the amounts calculated as if the borrower had made all contractual payments in a timely fashion) should not accrue during the forbearance.
Upon completion of the forbearance the lender should communicate with the borrower and determine if they are able to resume making regular contractual payments. If so, the lender may offer the borrower either a written re-payment plan to resolve any amount due or at the borrower’s request, evaluate the borrower for one of the three options outlined in Chapter 18.15 of the Handbook-1-3555.
Questions regarding program policy and this guidance may be directed to the National Office Division at sfhglpServicing@usda.gov or (202) 720-1452.