Fannie Mae updates guidance on payment deferrals and loan modifications after a forbearance and extends foreclosure moratorium

Federal Issues Covid-19 Fannie Mae Forbearance Foreclosure CARES Act

On May 14, Fannie Mae updated Lender Letter 2020-02 to provide updates regarding the reclassification process for certain pooled loans in response to the CARES Act.  The letter (previously discussed here) also provides guidance on evaluating a borrower for a payment deferral or mortgage loan modification after a forbearance and extend its foreclosure moratorium until June 30. The guidance on post-forbearance evaluations provides certain flexibility with respect to achieving quality right party contact (QRPC). Fannie Mae has eliminated the requirement that the servicer determine the occupancy status of the property and will consider the servicer as having achieved QRPC for purposes of evaluating a borrower who has experienced a hardship arising from Covid-19 if the servicer takes certain steps. Fannie Mae also extended the availability of certain post-disaster mortgage loan modifications in the Servicing Guide to borrowers impacted by Covid-19. The letter also extends Fannie Mae’s suspension of foreclosure-related activities until June 30.