The Federal Housing Finance Agency (FHFA) released a statement on May 13, 2020 announcing the release of a new payment deferral option for Fannie Mae (FNMA) and Freddie Mac (FHLMC) loans.

The new payment deferral option will allow for borrowers on a COVID-19 forbearance plan who are able to return to making their normal mortgage payment to apply the missed mortgage payment as due on sale or refinancing of the home, or the end of the loan.

It is important all borrowers be aware and understand the missed payments due to being on a forbearance plan remain an obligation and will ultimately have to be repaid. All servicers are required to evaluate borrowers for one of the several repayment options under the loss mitigation “hierarchy” of repayment and loan modification options. Payment deferral will now be included as one of those options.

Mortgage servicers for FNMA and FHLMC loans will begin offering the payment deferral option starting July 1, 2020. Information containing all of the details regarding the options can be found on FNMA’s and FHLMC’s websites. Furthermore, a FAQ was published by the Consumer Financial Protection Bureau (CFPB) to address questions surrounding the mortgage origination rules related to the COVID-19 emergency.

If you have additional questions about how this impacts your institution’s mortgage lending operations, contact a Doeren Mayhew regulatory compliance specialist.


By Heather Feltner, Lending and Compliance Specialist