Fannie and Freddie issue Covid-related servicing updates

Federal Issues Fannie Mae Freddie Mac Mortgages Mortgage Servicing Covid-19

On June 10, Fannie Mae and Freddie Mac issued numerous updates to temporary servicing guidelines due to the Covid-19 pandemic. Fannie Mae issued Lender Letter LL 2020-07, which, among other things (i) updates the workout option incentive fee structure introduced in LL-2020-09 (these updates are also reflected in LL-2020-05); (ii) clarifies when a HAMP borrower will keep “good standing” under a Covid-19 payment deferral; (iii) clarifies continued solicitation for a Fannie Mae Flex Modification after a borrower has defaulted on a Covid-19 payment deferral; and (iv) revises the Covid-19 payment deferral agreement. Additionally, LL 2020-02 clarifies that a servicer is not required to send a payment reminder notice to the borrower during an active forbearance plan term. Similar updates can be found in Freddie Mac’s Guide Bulletin 2020-21.