18.104.22.168 Transition Requirements for Borrowers Who Were On a TPP at the Time of the Disaster
Within thirty days prior to the end of the forbearance period, the servicer must determine whether the borrower’s financial circumstances continue to be adversely impacted by the disaster based on verbal confirmation with the borrower about their current financial condition and the most recent property inspection.
If the borrower was on a HAMP TPP at the time of the disaster and the borrower’s financial circumstances have not adversely changed (e.g., the borrower’s income is not less than it was at the time of the pre-forbearance TPP evaluation), then the servicer must offer the borrower a new HAMP TPP that includes the same TPP payment as the pre-forbearance TPP.
The servicer must not conduct a new NPV or forbearance limit analysis. For reporting purposes, the servicer should utilize the NPV determined for the pre-forbearance (or pre-disaster) TPP analysis, and may report anticipated forbearance amounts in excess of the forbearance limit, but only to the extent necessary to achieve the target payment. All other HAMP eligibility rules continue to apply, including that the complete Borrower Response Package used for the evaluation was submitted on or before December 30, 2016, and that the HAMP modification effective date is on or before December 1, 2017. Additionally, the servicer must not cancel the previous TPP, but must keep the borrower’s previous TPP in approved status to avoid re-underwriting the borrower. When preparing the modification agreement, the servicer must calculate the modification terms using updated delinquent interest and non-interest arrearage amounts that must be capitalized (i.e., through the day prior to the modified interest rate change date), as applicable, and in this instance only the servicer may forbear principal beyond the forbearance limit, but only to the extent necessary to achieve the target payment.
If the borrower was on a HAMP TPP at the time of the disaster but the borrower’s financial circumstances have adversely changed (e.g., the borrower’s income is less than it was at the time of the pre-forbearance TPP evaluation), the servicer must obtain an updated Borrower Response Package from the borrower and re-evaluate the borrower for HAMP in accordance with the requirements of chapter 9205 of the Single-Family Seller/Servicer Guide. If the borrower is no longer eligible for HAMP, then the servicer must evaluate the borrower for another foreclosure alternative in accordance with the evaluation hierarchy set forth in section 9201.2.
If the borrower was on a Freddie Mac flex modification at the time of the disaster, the servicer must make a new streamlined offer to the borrower for a flex modification TPP meeting the requirements of section 9206.5.
Regardless of the borrower’s financial circumstances, the borrower must complete a new three-month TPP that begins immediately following the forbearance plan to be eligible for a permanent modification.150
Borrowers will be considered for a Capitalization and Extension Modification for Disaster Relief (“Disaster Relief Modification”), along with a Flex Modification, provided the borrower is ninety or more days’ delinquent.
150 Freddie Mac Single-Family Seller/Servicer Guide § 8404.6(c).