Guide Bulletin 2017-25: Temporary Modification and Insurance Requirements Related to Disaster Relief for Servicers
November 2, 2017
Today's Single-Family Seller/Servicer Guide (Guide) Bulletin 2017-25 announces Servicing requirements to assist borrowers whose mortgaged premises or places of employment are located in Eligible Disaster Areas. These new requirements are in effect for all Eligible Disaster Areas on or after August 25, 2017.
This Guide Bulletin includes:
The Extend Modification for Disaster Relief. In collaboration with Fannie Mae and at the direction of the Federal Housing Finance Agency we're announcing a new temporary loan modification option. This temporary offering provides an additional option to assist borrowers whose mortgages or places of employment are located in Eligible Disaster Areas. While similar to the existing Capitalization and Extension Modification for Disaster Relief offering, it does not include capitalization of arrearages and is the first mortgage modification option in the Freddie Mac hierarchy for mortgages impacted by an Eligible Disaster. Must implement no later than February 1, 2018.
Revisions to the Capitalization and Extension Modification for Disaster Relief. We're updating the eligibility requirements to state that the borrower must be at least 30 days (or one payment) and less than 360 days (or 12 payments) delinquent at the time of evaluation for the modification. This change will allow you to offer this relief option earlier to affected borrowers.
- Changes to certain insurance requirements, including:
- Insurance loss settlements. To expedite the release of insurance funds to impacted borrowers in Eligible Disaster Areas, we're temporarily revising requirements for the disbursement of insurance proceeds. We're also clarifying that the "Mortgage status at the time of notification of loss" refers to the date the Eligible Disaster impacted the borrower's mortgaged premises, as reflected on the insurance claim.
- Borrower-requested cancellation of borrower-paid mortgage insurance (MI). We're also temporarily revising borrower payment history requirements for borrowers requesting cancellation of borrower-paid MI when the delinquency is a result of a disaster forbearance plan or Trial Period Plan. This change allows Servicers to work with disaster-impacted borrowers to cancel MI when the borrower has met all other obligations to do so.