MPP Announcement - COVID-19
Last Updated on March 23, 2020
This MPP Announcement includes temporary policies to enable Servicers to better assist borrowers impacted by COVID-19.
The Federal Home Loan Bank of Des Moines is actively monitoring reports about the potential impact of COVID-19 (coronavirus) on borrowers, PFIs and Servicers of MPP loans. The policies in this Announcement are effective immediately and are effective until further notice.
PFIs and Servicers are expected to abide by any/all federal or state laws or proclamations that may affect borrowers or loans affected by COVID-19.
In addition, PFIs and Servicers servicing MPP Government loans must follow the disaster relief policies and guidance issued by the applicable Government Agencies. (including: HUD Mortgagee Letter 2020-04)
The Federal Home Loan Bank of Des Moines will continue to evaluate the situation to determine whether this Announcement or MPP Guide provisions should be modified to provide additional relief.
PFIs and Servicers of MPP Traditional (Conventional) loans should note the following:
Forbearance plan eligibility
To assist borrowers who have experienced a hardship resulting from COVID-19 (for example, unemployment, reduction in regular work hours, or illness of a borrower/co-borrower or dependent family member) which has impacted their ability to make their monthly mortgage loan payment, the Servicer should evaluate the borrower for a forbearance plan. Servicer must achieve quality right party contact (QRPC) with the borrower prior to offering a forbearance plan. In evaluating borrowers, Servicers are not required to obtain documentation of borrowers’ hardship.
Servicers under the Scheduled/Scheduled remittance option are expected to continue to make P&I advances as required.
Servicers are expected to begin attempts to contact the borrowers who have received a forbearance plan in response to COVID-19 no later than 30 days prior to the expiration of the forbearance plan term, to complete an assessment of each Mortgage Loan to determine the appropriate workout alternative that best fits the Borrower’s circumstances and determine whether a loan modification is appropriate. These efforts must continue until either QRPC is achieved or the forbearance plan term has expired.
Credit bureau reporting
Servicers must suspend reporting the status of a mortgage loan to credit bureaus during an active forbearance plan, or a repayment plan or Trial Period Plan where the borrower is making the required payments as agreed, even though payments are past due, as long as the delinquency is related to a hardship resulting from COVID-19.
Suspension of foreclosure sales and evictions
Servicers must suspend all foreclosure sales and evictions for the next 60 days, unless the property has been determined to be vacant or abandoned.
In addition, Servicers must consider waiving late fees for 90 days and provide guidance to borrowers with respect to available relief provisions and/or loss mitigation alternatives.
Our Mortgage Products Group is ready to assist you with any questions or concerns you may have.