Major Disaster Policy Guide Update
Effective Date: Immediately
In an effort to provide continued guidance to PFIs and Servicers, and to further provide assistance to those Borrowers affected by a Major Disaster, the MPF Program has updated the MPF Program Guide and the MPF Traditional Selling and Servicing Guides to incorporate its policies associated with providing assistance to borrowers impacted by a Major Disaster. In the past, when a Major Disaster occurred, PFIs and Servicers waited for MPF Announcements to provide guidance. With this Guide update, the guidance contained in those announcements is now incorporated into the Guides, allowing PFIs and Servicers to take immediate actions in assisting Borrowers affected by a Major Disaster.
Clarifications Applicable to All Products
Disaster Related Policy
A NEW Chapter has been added to the MPF Program Guide highlighting the overall MPF Program policy for assisting borrowers impacted by a Major Disaster. See MPF Program Guide Chapter 9.
A NEW MPF Glossary definition for Major Disaster has been added.
MPF Traditional Product
Appraisal requirements were clarified for Limited Cash-Out Refinances and generally for all properties located in Major Disaster areas. See MPF Selling Guide section 126.96.36.199.1 and 7.15.
Eligibility and underwriting requirements were clarified for Government Loans to ensure PFIs follow the applicable Government Agency requirements and guidance relating to assisting Borrowers affected by a Major Disaster. See MPF Selling Guide section 2.8.5
Servicers’ obligations clarified to ensure they do not jeopardize the recovery of insurance proceeds, and to grant permission to waive late payment charges in the event of a Major Disaster. See MPF Servicing Guide section 4.6.7.
Major Disaster language was removed from Delinquent Government Loans section. See MPF Servicing Guide section 8.2.
Process for PFIs to identify the impact of a Major Disaster to any affected Mortgage Loans was clarified. See MPF Servicing Guide section 8.7.1.
Process for offering Borrowers assistance when affected by a Major Disaster was clarified. See MPF Servicing Guide section 8.7.2
Obligation to follow the applicable Government Agency requirement for servicing loans in a Major Disaster area was clarified. See MPF Servicing Guide section 188.8.131.52
Process for addressing foreclosure proceedings pending at the time a Major Disaster is declared was clarified. See MPF Servicing Guide section 8.7.4.
A section was added regarding the treatment of insurance proceeds for Mortgage Loans impacted by a Major Disaster. See MPF Servicing Guide section 8.7.5.