Impact of COVID-19 on MPF Xtra Servicing
Effective Date: Immediately
On July 15, 2020 Fannie Mae issued updates to Lender Letter LL-2020-02 and Lender Letter LL-2020-07, respectively, which communicated updates to temporary policies previously announced, to enable Servicers to better assist Borrowers impacted by COVID-19. The policies in the Lender Letters are effective immediately and are effective until Fannie Mae provides further notice, unless otherwise stated.
Updates to Fannie Mae Lender Letter LL-2020-02- Impact of COVID-19 on Servicing
- Clarified Servicer requirements related to disbursing insurance loss proceeds for Borrowers impacted by COVID-19.
- Clarified when a Borrower on a COVID-19 related forbearance plan maintains good standing.
Updates to Fannie Mae Lender Letter LL-2020-07- COVID-19 Payment Deferral
- Updated the requirements for repayment of any escrow shortage amount identified in connection with a COVID-19 payment deferral or as part of the next annual analysis.
- Clarified that the Servicer must evaluate the Borrower for a Flex Modification in accordance with the reduced eligibility criteria when the Borrower becomes 60 days delinquent within six months of the COVID-19 related payment deferral’s effective date and the Servicer is unable to achieve QRPC.
- Please note the update on how servicing fees, guaranty fees, and excess servicing fees (if applicable) will be reimbursed for mortgage loans does not apply to MPF Xtra. The Servicer will receive these funds upon liquidation of the mortgage loan in accordance to MPF Xtra Servicing guide Section 3.1 Servicing Fees.
PFIs and Servicers originating, delivering or servicing:
- MPF Traditional (Conventional) loans must follow the policies and guidance recently issued by the MPF Program.Please visit the MPF Website to view recently published MPF Announcements.
- MPF Government loans and MPF Government MBS loans, must follow policies and guidance issued by the applicable Government Agencies.
- MPF Direct loans, must follow policies and guidance issued by the product’s investor, Redwood Trust.
To gain a full understanding of these topics, Servicers should review the entire Fannie Mae Lender Letter plus any applicable Fannie Mae Servicing Guide chapters, forms, or exhibits noted in the announcement.