On March 18, 2020, Fannie Mae published Lender Letter LL-2020-02 regarding temporary servicing requirements due to the impact of Coronavirus COVID-19. LL-2020-02 was updated with additional information on March 25, 2020. LL-2020-02 communicates temporary polices that have been created so that servicers can better assist borrowers who are affected by COVID-19. Fannie Mae is working together with Freddie Mac under the guidance of the Federal Housing Finance Agency (FHFA) to create these temporary policies. LL-2020-02 covers the following items and will updated and republished as new guidance becomes available:
LL-2020-02 content published Mar. 18, 2020
- Forbearance plan eligibility: Expanding eligibility for a forbearance plan for borrowers impacted by COVID-19.
- Evaluating the borrower for a payment deferral or mortgage loan modification after a forbearance plan: Clarifying the mortgage loan modifications that must be considered near the conclusion of a forbearance plan term. UPDATED Mar. 25, 2020 to require that a borrower be evaluated for payment deferral prior to these mortgage loan modifications.
- Credit bureau reporting: Clarifying that servicers must suspend credit reporting when the hardship is related to COVID-19.
- Suspension of foreclosure sales: Instructing servicers to not allow any foreclosure sales within the next 60 days.
LL-2020-02 additions on Mar. 25, 2020
- Attempting to establish QRPC: Reminding servicers of acceptable methods in attempting to achieve quality right party contact (QRPC).
- Reporting a reason for delinquency code: Providing a specific “reason for delinquency” code for use in reporting a delinquent mortgage loan associated with a borrower impacted by COVID-19.
- Property inspections and preservation: Providing flexibility with regard to inspections and preservation in light of COVID-19 concerns.
- Submission of financial statements and reports: Extending the deadline for submission of financial statements and Form 582 to Apr. 30, 2020.
LL-2020-02 also provides information about Fannie Mae’s Disaster Response Network as a reference for Fannie Mae borrowers.
These temporary policies are effective immediately and will remain in effect until Fannie Mae provides further notice, unless otherwise stated.