18.104.22.168 Requesting FHA Forbearance
HUD has implemented pandemic-related forbearance provisions through Mortgagee Letters, interagency guidance, and through FAQs updated on its website. HUD had imposed a September 30, 2021 deadline for borrowers to make their initial requests for forbearance plans; however pursuant to Mortgagee Letter 2021-24, HUD has now stated that borrowers can request forbearance plans through the end of the COVID-19 National Emergency.345 According to HUD, “[n]o COVID-19 Forbearance period may extend beyond six months after the end of the COVID-19 National Emergency or September 30, 2022, whichever is later.”346
According to HUD, the maximum length of a COVID-19 forbearance plan depends on when the borrower makes the initial request.347 HUD has provided extended forbearance beyond the standard twelve months to borrowers who started their plans by June 30, 2020, and who still need forbearance to manage pandemic related hardships.348 Borrowers meeting these requirements may receive an addition six months of forbearance totaling eighteen months. The six months of additional forbearance must be provided in three-month increments.
Borrowers who started their initial forbearance plan between June 30, 2020, and September 30, 2020, are entitled to a maximum of fifteen months.349 Borrowers accessing forbearance between September 30, 2020 and September 30, 2021 get a maximum of twelve months of forbearance.
Borrowers who start forbearance plans between October 1, 2021, and the end of the pandemic are eligible to receive twelve months of forbearance subject to some limitations. A borrower may receive the second six-month forbearance period after the initial term if “the Borrower has utilized a full six months of initial COVID-19 Forbearance; and the initial COVID-19 Forbearance will expire on or before the end of the COVID-19 National Emergency.”350 Importantly, the forbearance term cannot extend beyond the later of September 30, 2022, or six months after the end of the COVID-19 National Emergency period.
Under the language of Mortgagee Letter, Borrowers should not have to submit any documentation to access FHA forbearance. In fact, according to HUD, servicers “may utilize any available methods for communicating with a Borrower regarding a forbearance.”351 The agency confirmed that borrowers may communicate acceptance by broad means. “[T]he Borrower may reply to that communication requesting a COVID-19 Forbearance, via email, phone call, or any other method of communication clearly made available to the Borrower by the Mortgagee.”352
In the interagency guidance that HUD joined with VA and the USDA, HUD confirmed that borrowers have the right to request the forbearance for a specific duration. “Servicers must approve the forbearance for the amount and time that the borrower requests. Under the CARES Act, this is done at the borrowers’ request and for as long as they request, up to 360 days in total (initial up to 180 days and then up to another 180 days, if requested).”353FHA is silent on whether a borrower may receive more than two forbearance periods if they received a shorter period. Advocates seeking up to a year of forbearance for borrowers in that position should rely on CFPB guidance interpreting CARES Act as providing a full 360 days regardless of shorter individual periods.
Along those lines, borrowers reported that, especially early in the pandemic, servicers were not allowing borrowers to choose the length of forbearance periods and instead simply gave ninety days of forbearance in response to any request. If servicers refuse to provide additional time upon the expiration of forbearance, advocates should raise the interagency guidance with servicers. Borrowers should also consider using the RESPA Notice of Error provisions described above and in Chapter 3, supra.
345 HUD, Mortgagee Letter 2021-24 (Sept. 27, 2021)
346 HUD, Mortgagee Letter 2021-24 (Sept. 27, 2021).
347 HUD, Mortgagee Letter 2021-24 (Sept. 27, 2021)
348 HUD, Mortgagee Letter 2021-05 (Feb. 16, 2021); The White House, Fact Sheet: Biden Administration Announces Extension of COVID-19 Forbearance and Foreclosure Protections for Homeowners (Feb. 16, 2021); Federal Housing Finance Agency, News Release, FHFA Extends COVID-19 Forbearance Period and Foreclosure and REO Eviction Moratoriums (Feb. 25, 2021).
349 HUD, Mortgagee Letter 2021-24 (Sept. 27, 2021)
350 HUD, Mortgagee Letter 2021-24 at 5
351 HUD, Mortgagee Letter 2020-06 (Apr. 1, 2020). See also HUD, Mortgagee Letter 2021-04 (Jan. 26, 2021).
352 HUD, Mortgagee Letter 2020-22 (July 8, 2020).
353 Interagency Guidance, CARES Act Forbearance Fact Sheet for Mortgagees and Servicers of FHA, VA, or USDA Loans, available at https://www.hud.gov.