Borrowers facing COVID-19 hardships with Fannie Mae loans are entitled to forbearance. As with its standard forbearance plans, borrowers do not need to submit documentation to Fannie Mae to access COVID-19 forbearance. Fannie Mae allows the servicer to offer forbearance in increments shorter than 180 days; however, it also lets borrowers use the full 360 days of forbearance if needed. “If the borrower’s COVID-19 related hardship has not been resolved during an incremental forbearance period, the servicer must extend the borrower’s forbearance period, not to exceed 12 months total.”50 No later than thirty days prior to the expiration of the COVID-19 forbearance, the servicer must reach out to the borrower to discuss workout options. These could include additional forbearance or Fannie Mae’s post-forbearance options.
Fannie Mae guidance regarding COVID-19 forbearance does not include an expiration date, and it also builds from Fannie Mae’s standard forbearance plan language. Language regarding the mandatory nature of forbearance and the need for Quality Right Party Contact (QRPC) in Fannie Mae’s COVID-19, forbearance, however, is discussed in relation to the CARES Act, which has a covered period as described above. Nonetheless, advocates should point to the lack of expiration and the fact that the language is not explicitly conditioned on the CARES Act in arguing that the full terms of Fannie Mae’s COVID-19 forbearance continues beyond any CARES Act expiration. In addition, no Fannie Mae guidance prevents a person with a COVID-19 hardship who defaults after receiving a final foreclosure alternative from receiving a subsequent forbearance.