Impact of COVID-19 on MPF Xtra Servicing
Effective Date: Immediately (unless otherwise noted)
On May 13, 2020 Fannie Mae issued Lender Letter LL-2020-07 and on May 14, 2020, Fannie Mae issued an update to Lender Letter LL-2020-02, respectively, which communicated updates to temporary policies previously announced, to enable servicers to better assist borrowers impacted by COVID-19. The policies in the Lender Letters are effective immediately and are effective until Fannie Mae provides further notice, unless otherwise stated.
NEW Fannie Mae Lender Letter LL-2020-07:
Introduced a COVID-19 payment deferral, a new workout option specifically designed to help Borrowers impacted by a hardship related to COVID-19 return their mortgage to a current status after up to 12 months of missed payments.
This workout option enables Servicers to assist Borrowers who have completed a COVID-19 related forbearance plan or who have a confirmed but resolved COVID-19 financial hardship.
Effective: Beginning Jul. 1, 2020, Servicers must evaluate Borrowers for COVID-19 payment deferral in accordance with this Lender Letter for Borrowers whose hardships related to COVID-19 have been resolved and who are able to continue making their full monthly contractual payment, but cannot afford full reinstatement or a repayment plan to bring their mortgage loan current.
Updates to Fannie Mae Lender Letter 2020-02:
- Clarified when the Servicer must not complete property inspections and preservation activities for a property securing a mortgage loan where the Borrower is experiencing a hardship related to COVID-19.
- Updated the evaluation hierarchy to incorporate the introduction of COVID-19 payment deferral and to reflect the effective date of the National Emergency declaration related to COVID-19 in the eligibility criteria (rather than the declaration date of March 13, 2020).
- Extended the suspension of foreclosure-related activities and the requirement that Servicers file motions for relief from the automatic stay in bankruptcy cases to June 30, 2020.
As a reminder, PFIs and Servicers originating, delivering or servicing:
- MPF Traditional (Conventional) loans must follow the policies and guidance recently issued by the MPF Program. Please visit the MPF Website to view recently published MPF Announcements.
- MPF Government loans and MPF Government MBS loans, must follow policies and guidance issued by the applicable Government Agencies.
- MPF Direct loans, must follow policies and guidance issued by the product’s investor, Redwood Trust.
To gain a full understanding of these topics, Servicers should review the entire Fannie Mae Lender Letter plus any applicable Fannie Mae Servicing Guide chapters, forms, or exhibits noted in the announcement.