InfoBytes Blog
Fannie and Freddie issue Covid-19 servicing updates
On December 9, Fannie Mae and Freddie Mac issued Covid-19 servicing updates (Lender Letter 2020-02 here, and Bulletin 2020-46 here), which, among other things, address the extension of the foreclosure moratorium and update the requirements of borrower-requested cancellation of mortgage insurance. Specifically, the servicing updates address the extension of the moratorium on single-family foreclosures and real estate owned (REO) evictions from December 31 until at least January 31, 2021 (previously covered by InfoBytes here). Additionally, the servicing updates include new payment-history requirements when a borrower requests the cancellation of mortgage insurance post-Covid-19-related hardship. In order to request cancellation, the borrower’s payment history must not have a payment 30 days or more past due in the preceding 12 months (and/or 60 or more days past due in the preceding 24 months) except when as a direct result of a Covid-19-related hardship and, following the hardship, a transition to a workout option to cure the delinquency. For mortgages restored to current status under the Covid-19 Payment Deferral, the borrower is required to have made three consecutive payments following the settlement of the deferral to meet the requirements.