Fannie Mae: Lender Letter LL-2020-02: Impact of COVID-19 on Servicing

Fannie Mae: Lender Letter LL-2020-02: Impact of COVID-19 on Servicing

Updated 12/9/20: Fannie Mae updated LL-2020-02 to include a temporary mortgage insurance termination policy change to waive certain payment history requirements for borrowers who have experienced a financial hardship related to COVID-19, and to extend the existing suspension of certain foreclosure-related activities to Jan. 31, 2021.

Lender Letter LL-2020-02

Investor Update
October 14, 2020

Source: Fannie Mae

We are actively monitoring reports about the spread of COVID-19 (coronavirus) in the United States and understand that there are concerns about its potential impact on borrowers. At the direction of the Federal Housing Finance Agency (FHFA) and in alignment with Freddie Mac, we are communicating temporary policies in this Lender Letter to enable servicers to better assist borrowers impacted by COVID-19. The policies in this Lender Letter are effective immediately and are effective until Fannie Mae provides further notice, unless otherwise stated.

We are releasing information to our servicers as quickly as possible and will update and republish this Lender Letter as new guidance becomes available.

Additions to Lender Letter on Jul. 15, 2020, updated Oct. 14, 2020

▪ Disbursing insurance loss proceeds: Clarifying servicer requirements related to disbursing insurance loss proceeds for
borrowers impacted by COVID-19.
▪ Impact of COVID-19 on Fannie Mae Home Affordable Modification Program (HAMP) ”Pay for Performance” incentives: Clarifying when a borrower on a COVID-19 related forbearance plan maintains good standing.
UPDATED Oct. 14, 2020 to clarify when a borrower impacted by COVID-19 remains eligible for any future HAMP “Pay for Performance” incentives.