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12.2.2.4 Mortgage Forbearance

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The servicer is authorized to evaluate the borrower for a forbearance plan without receiving a complete Borrower Response Package.109 The borrower’s monthly payment must be reduced or suspended during the forbearance plan term.110 The property securing the mortgage loan may be a principal residence, a second home, or an investment property. The property must not be condemned or abandoned, but it may be vacant.111

The availability and terms of the forbearance extended by the servicer will depend upon whether the servicer has been in contact with the borrower, that is obtained “quality right party contact” (QRPC). Where the servicer is in contact with the borrower during the disaster relief period, and the eligibility criteria for a forbearance plan are met, the servicer may offer an initial forbearance plan term of up to six months. The servicer may grant an extension of the initial forbearance plan term of up to six additional months. A servicer is authorized to offer the six-month terms in separate, shorter increments.

Where the servicer has not obtained QRPC with the borrower, the servicer may offer an initial forbearance term of up to three months, provided that the property is in a declared disaster area, the mortgage loan was current or fewer than two months delinquent at the time the disaster occurred, and the loan is equal to or greater than one month delinquent.112

The servicer must receive Fannie Mae’s prior written approval for a forbearance plan to exceed a cumulative term of twelve months (measured from the start date of the initial forbearance plan) or that will result in the mortgage becoming more than twelve months delinquent. When the servicer initially offers an arrangement that includes a combination of both forbearance and a repayment plan, the combined period must not exceed thirty-six months.113

Footnotes

  • 109 Fannie Mae, Single-Family Servicing Guide, D2-3.2-01, Forbearance Plan

  • 110 Fannie Mae, Single-Family Servicing Guide, D2-3.2-01, Forbearance Plan.

  • 111 Fannie Mae, Single-Family Servicing Guide, D2-3.2-01, Forbearance Plan.

  • 112 Fannie Mae, Single-Family Servicing Guide, D2-3.2-01, Forbearance Plan.

  • 113 Fannie Mae, Single-Family Servicing Guide, D2-3.2-01, Forbearance Plan.