MPF Program Weekly Recap - COVID 19 Communications
Effective Date: Immediately
The MPF Program is actively monitoring reports about the potential impact of COVID-19 (coronavirus) on borrowers, PFIs and Servicers. We have communicated various investor updates and temporary policies via MPF Announcements and e-alerts to ensure our PFIs and Servicers receive the most up to date information and enable you to better assist borrowers impacted by COVID-19. This bulletin will provide a summary of the MPF Announcements and e-alerts that the MPF Program published in regards to COVID-19 during the week of March 23, 2020 through March 27, 2020. We have also included a “Frequently Asked Questions” section in this bulletin that may assist PFIs and Servicers with questions they may have regarding our policies related to COVID-19.
The MPF Program published the following announcements which provided guidance to PFIs and Servicers for assisting borrowers that have been impacted by the recent pandemic and provided a summary of applicable disaster relief related policies:
MPF Announcement 2020-07 (March 13, 2020) regarding forbearance plans and business continuity/disaster recovery programs.
MPF Announcement 2020-09 (March 19, 2020) regarding forbearance plans, credit reporting, suspension of foreclosures and evictions, and waiver of late fees.
MPF Announcement 2020-10 (March 24, 2020) regarding verbal verification of employment, continuity of income, electronic documents and signatures, title insurance and business continuity.
MPF Announcement 2020-12 (March 26, 2020) regarding quality right party contact, delinquency codes, property inspections and preservation, MI termination requests.
The MPF Program issued the following e-alerts as a result of communications received from Redwood Trust, Nationstar Mortgage and Colonial Savings related to COVID-19 and its impact on various MPF products.
Lock Desk for MPF Direct Product is Currently Unavailable (March 19, 2020)
Redwood Trust, the investor for the MPF Direct product, is currently going through a reprice and their Lock Desk is now closed. PFIs should contact the Redwood Trust Lock Desk regarding any updates to your current loan pipeline. Effective immediately, any updates, including but not limited to, requests for lock extensions and/or relocks, will
need to be preapproved in writing by the Redwood Trust Lock Desk.
The Redwood Trust Lock Desk can be reached through email at firstname.lastname@example.org or by phone at (415)-389-7375.
MPF Government MBS Servicing Release Updates (March 24, 2020)
Effective immediately, Nationstar Mortgage LLC (Nationstar), the purchasing Servicer for servicing released mortgage loans delivered under the MPF Government MBS product, has made the decision to temporarily suspend purchases of MPF Government MBS mortgage servicing. As such, PFIs will not be able to enter into new Master Commitments or Delivery Commitments for MPF Government MBS servicing released. The MPF Program continues to work with Nationstar closely and will communicate additional information as needed.
MPF Traditional – Servicing Released for Conventional and Government Loans (March 25, 2020)
Effective immediately, Colonial Savings, the purchasing Servicer for servicing released mortgage loans delivered under the MPF Traditional, Conventional and Government products, is publishing a new Servicing Released Premium (SRP) schedule for Conventional loans and will temporarily suspend purchases of Government servicing. The updated SRP schedule for Conventional loans has been posted and the SRP schedule for Government loans has been removed. As such, PFIs will not be able to enter into new Master Commitments or Delivery Commitments for MPF Government servicing released to Colonial Savings. Also, due to the disruption and uncertainty in the MSR market, Colonial Savings is suspending purchasing servicing in the states of California, New York and Washington.
The MPF Program and its staff are here to serve our PFIs, and we wish you health and safety in these challenging times. Please contact the MPF Service Center with any questions or concerns (877-FHLB-MPF).
Frequently Asked Questions
The following FAQ document provides a list of frequently asked questions applicable to MPF Traditional Loans only.
For MPF Government loans and MPF Government MBS loans PFIs and Servicers should follow policies and guidance issued by the applicable Government Agencies.
For MPF Xtra loans PFIs and Servicers should follow policies and guidance issued by Fannie Mae.
For MPF Direct PFIs and Servicers should follow policies and guidance issued by the product’s investor, Redwood Trust.
FREQUENTLY ASKED QUESTIONS
(Applicable to MPF Traditional Loans only)
Q1: Do PFIs and Servicers have automatic authority to allow up to 90-days of forbearance if someone is impacted by COVID-19?
A1: Yes - Servicers are authorized to grant a forbearance plan or temporarily suspend mortgage payments for up to 90 days, without the Master Servicer’s authorization. Following the first 90 day period, with Master Servicer authorization, Servicer may extend the forbearance plan or payment suspension for an additional 90 days, but Servicers must also complete an assessment of each Mortgage Loan to determine the appropriate workout alternative that best fits the Borrower’s circumstances. See MPF Traditional Servicing Guide section 8.7.2.
The Servicer is required to obtain approval prior to entering into a Forbearance Plan or Repayment Plan with a Borrower that exceeds three (3) months. The Servicer must submit the Workout Worksheet (Form SG354) and all required supporting documentation as indicated on the Workout Worksheet prior to entering into a Forbearance Plan or Repayment Plan with a Borrower that exceeds three (3) months.
Q2: Is there a forbearance template available that we should utilize?
A2: No specific format or form agreement is required. The MPF Traditional Servicing Guide Section 8.5.3 requires the Forbearance Plan be a written agreement signed by both the Servicer and Borrower prior to the effective date of the Forbearance Plan, and be legally binding and enforceable under all Applicable Laws. See MPF Traditional Servicing Guide Chapters 8.5.3 and 8.7.2. If the Forbearance Plan exceeds three (3) months, the Servicer must submit the Workout Worksheet (Form SG354) and all required supporting documentation as indicated on the Workout Worksheet prior to entering into the plan.
Q3: When should PFIs or Servicers reach out to the MPF Provider for direction or approval?
A3: PFIs and Servicers should reach out to the MPF Service Center with any questions or concerns, and with any requests that fall outside the MPF Guides or announced temporary policies (877-FHLB-MPF).
Q4: Can the forbearance plan be extended after the initial 90 day period without approval?
A4: Following the first 90 day period, Servicer must obtain approval to extend the forbearance plan or payment suspension for an additional 90 days.
Servicers are expected to begin attempts to contact borrowers who have received a forbearance plan in response to COVID-19 no later than 30 days prior to the expiration of the forbearance plan term, to complete an assessment of each Mortgage Loan to determine the appropriate workout alternative that best fits the Borrower’s circumstances and determine whether a loan modification is appropriate.
After completing an assessment of each Mortgage Loan, the Servicer determines that a Repayment Plan is the appropriate workout alternative, the Servicer does not need to request approval from the Master Servicer prior to entering into a repayment plan with the Borrower, unless the repayment plan exceeds three (3) months and the Mortgage Loan is not covered by MI.
Servicers are required to obtain MI approval where applicable.
Q5: What is the difference between a forbearance plan and a repayment plan?
A5: Under a forbearance plan, Servicers are authorized to temporarily suspend mortgage payments for up to 90 days. Following the first 90 day period, with Master Servicer authorization, Servicer may extend the forbearance plan or payment suspension for an additional 90 days. Prior approval is also required prior to entering into a Forbearance Plan with a Borrower that exceeds three (3) months.
Under a repayment plan, the Borrower agrees to make payments in excess of the regular monthly payments over a period not to exceed twelve (12) months in order to cure a Delinquency. Prior approval, and, where applicable, the primary and/or supplemental mortgage insurer consent must be obtained for longer period of time.
Q6: How should Servicer process and report on loans that were granted forbearance plans?
A6: Servicer must report the delinquency reason code 022, when reporting the delinquency status of such mortgage loans. For mortgage loans where the servicer would have reported the delinquency reason code of 022 the servicer must now use reason for delinquency code 007.
Servicers should continue providing a Delinquent Mortgage Report (Servicing Guide Exhibit B) reporting by the fifth (5th) Business Day of each month, which contains the status of all Delinquent Mortgage Loans that are thirty (30) or more days delinquent as of the last day of the preceding month. Loans should be reported with the actual next payment due date and principal balance.
Servicers under the Scheduled/Scheduled remittance option are expected to continue to make advances as required.
Servicers under the Actual/Actual remittance option should not advance the due date or defer payments to the back of the loan and extend the maturity.
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- MPF Marketing Bulletin 2020-04