Fannie Mae Provides Servicers with Additional Information Ahead of Changes to Servicer P&I Advance Requirements and Information on Incentive Fees for Retention Workout Options
Fannie Mae published two Lender Letters today, LL-2020-08, Changes to Servicer Principal and Interest Advance Requirement, and LL-2020-09, Incentive Fees for Retention Workout Options, to its single-family servicers.
LL-2020-08 describes operational considerations in response to the Federal Housing Finance Agency (FHFA) directive on April 21, 2020 to limit servicer obligations to advance scheduled monthly payments to four months for scheduled/scheduled remittance type mortgage loans. The Lender Letter also notes that Fannie Mae is not revising the timing of delinquency advance reimbursements to servicers as a result of these pending changes.
At the direction of FHFA, and in alignment with Freddie Mac, LL-2020-09 introduces a new temporary structure for incentive fees for completed repayment plans, payment deferrals/COVID-19 payment deferrals, and Fannie Mae Flex Modifications.
In addition, three existing Lender Letters have been updated, including Lender Letter LL-2020-07, COVID-19 Payment Deferral, which includes, among other items, clarification on continued solicitation for a Fannie Mae Flex Modification based on reduced eligibility criteria when a borrower has defaulted on a COVID-19 payment deferral.
Access the latest investor news and information related to the COVID-19 pandemic on the COVID-19 Investor Resources page.