Fannie Mae continues to revise guidance and communicate temporary policies to ensure servicers can assist borrowers impacted by COVID-19 in a Lender Letter (LL-2020-02). On May 14, 2020, Fannie Mae issued an update regarding reclassification of MBS mortgage loans (previous WBK coverage of updates can be found here).
Under the Amended and Restated 2007 Single-Family Master Trust Agreement, MBS mortgage loans with pool issue dates on or after June 1, 2007, through December 1, 2008, are removed from the MBS pool after six successive months of forbearance. Due to the CARES Act, Fannie Mae has temporarily changed this policy. If a borrower is impacted by COVID-19 and is provided a forbearance plan, the loan will not be removed from the MBS pool for the period of the forbearance plan.
The change will be effective with the June 2020 monthly delinquency status reporting cycle. It is applicable to loans that have been reported with the forbearance code and the energy-environment costs reason code.
Additionally, the revised guidance:
- Describes when servicers must complete property inspections and preservation activities where the borrower is experiencing hardship related to COVID-19;
- Clarifies the evaluation hierarchy for payment deferrals or loan modifications; and
- Extends the suspension of foreclosure-related activities through June 30, 2020, and also extends the temporary suspension of the requirement that servicers file motions for relief from automatic stay in bankruptcy cases (although servicers are still required to work with bankruptcy counsel to determine the appropriate time to file such motions).