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12.3.6.3 Requesting FHA Forbearance

Significant Law Change

HUD has implemented pandemic-related forbearance provisions through Mortgagee Letters, interagency guidance, and through FAQs updated on its website. Pursuant to Mortgagee Letter 2021-05, borrowers must submit their initial requests for forbearance by June 30, 2021. According to HUD, “[n]o COVID-19 Forbearance period may extend beyond June 30, 2022.”89 However, advocates should monitor for further updates due to the changing administration.

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.”90 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.”91

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).”92FHA 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.

HUD has provided extended forbearance to borrowers who started their plans by June 30, 2020, and who still need forbearance to manage pandemic related hardships.93 Borrowers meeting these requirements may receive an addition six months of forbearance beyond the twelve months already accessible. The six months of additional forbearance must be provided in three month increments.

Footnotes

  • 89 HUD, Mortgagee Letter 2021-05 (Feb. 16, 2021).

  • 90 HUD, Mortgagee Letter 2020-06 (Apr. 1, 2020). See also HUD, Mortgagee Letter 2021-04 (Jan. 26, 2021).

  • 91 HUD, Mortgagee Letter 2020-22 (July 8, 2020).

  • 92 Interagency Guidance, CARES Act Forbearance Fact Sheet for Mortgagees and Servicers of FHA, VA, or USDA Loans, available at https://www.hud.gov.

  • 93 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).