The government shutdown may have an impact on businesses that rely on work from government agencies or that offer goods and services. Cenlar provides our assurance that our service levels currently remain unaffected. As a service to our clients, we have summarized several recent communications from governmental agencies. This information being provided is limited to potential servicing impacts and is for informational purposes. Please consult applicable individuals and the referenced communications below to determine how you may be directly impacted. For your convenience, we have communications relating to the government shutdown below:
The government shutdown may own may impact a borrower’s ability to make scheduled mortgage payments or payments on a repayment plan or Trial Period Plan. To assist borrowers who are unable to make their monthly mortgage loan payment as a result of the federal government shutdown, the servicer can offer Unemployment Forbearance. The servicer must follow Servicing Announcement, SVC-2012-01: Introduction to Unemployment Forbearance, including the following requirements:
The borrower must have a financial hardship as a result of the shutdown; a complete borrower response package is not required; the Unemployment Forbearance plan must be communicated in writing; the Unemployment Forbearance term shall be for a period not to exceed six months or until the government shutdown period expires, whichever comes first; Fannie Mae’s approval is not required for the six months of the Unemployment Forbearance; A borrower who is currently performing on a repayment plan or Trial Period Plan and is impacted by the government shutdown may seek consideration for an Unemployment Forbearance. If the borrower does convert from a repayment plan or a Trial Period Plan to an Unemployment Forbearance, the borrower may subsequently be eligible for a repayment plan or modification upon successful completion of the Unemployment Forbearance and if eligible, must be placed on a new repayment plan or Trial Period Plan.
In addition, Servicers must suspend credit bureau reporting for borrowers granted Unemployment Forbearance related to the federal government shutdown. Late payment charges must be waived, if the borrower’s payment is late because he or she has been furloughed or received reduced pay as the result of the government shutdown and accepts a relief or workout option offered by the servicer.
The number for Fannie Mae’s National Servicing Organization’s Servicing Solutions Center is 1-888-326-6435.
The following accommodations for affected borrowers are available:
MPF Portfolio Products
Servicers are authorized to grant forbearance or temporarily suspend conventional mortgage payments for up to three months (October, November, and December 2013) or until the shutdown period expires, whichever comes first, for borrowers whose income is affected by the shutdown. Servicers under the Scheduled/Scheduled remittance option are expected to continue to make P&I advances as required. Servicers that are servicing government loans should follow the shutdown policies issued by FHA, HUD, VA, or RHS as applicable. Servicers must consult with the master servicer if assistance is needed in determining how this policy should be applied, before granting relief that exceeds three months, or granting any relief to a borrower under a plan to cure a delinquency, including the Temporary Loan Modification Plan. Servicers must obtain from the borrower a written explanation and any supporting documentation the servicer determines to be necessary on the borrower’s current situation, including determining the extent of the borrower’s loss of income.
In addition, Servicers must also not file negative reports to the credit repositories for any payments not made for the months of October, November, and December 2013 for borrowers granted forbearance, or temporarily suspended conventional mortgage payments due to the shutdown. Late payment charges must be waived for the months of October, November, or December if the borrower’s payment is late because they were furloughed, or received reduced pay as the result of the shutdown and accepts a relief or workout option offered by the servicer.
MPF Xtra Product
To assist borrowers who are unable to make their regular monthly mortgage payment as a result of the shutdown, the servicer can offer the Fannie Mae Unemployment Forbearance program. The servicer must follow Fannie Mae Servicing Announcement, SVC-2012-01.
The telephone number for the MPF Customer Support Desk is 877-INFO-MPF (877-463-6673).
The Dept. of VA, assuming that there would be a shutdown, advised that they will continue to operate as normal. The VA Home Loan Guaranty Program will also continue to function as normal. Lenders and Servicers should continue normal activities such as: (1) Lenders continuing to submit funding fees through the VA Funding Fee Payment System; (2) Lenders obtaining their Loan Guaranty Certificates in the WebLGY system; (3) Lenders continuing to order and receive appraisals and issue Notices of Value; (4) Lenders and Veterans continuing to obtain a Certificate of Eligibility online through the appropriate systems; (5) and Servicers continuing to perform loan modifications, submit claims and receive claim payments, and convey properties to VA. The Circular is to automatically rescind on 1/1/14.
If you have any questions, please contact your Relationship Manager.