Fannie Mae issued an update to Lender Letter LL-2021-07, requiring servicers to perform an escrow analysis when evaluating eligibility for a COVID-19 payment deferral or a Fannie Mae Flex Modification for COVID-19 impacted borrowers. Per the updated Lender Letter, Fannie Mae now requires servicers to:
- perform an escrow analysis when evaluating a COVID-19 impacted borrower for a COVID-19 payment deferral or Fannie Mae Flex Modification;
- inform the borrower of the full monthly contractual payment based on repayment of any escrow shortage amount over a term of 60 months before the borrower can accept the COVID-19 payment deferral or Fannie Mae Flex Modification; and
- spread any escrow shortage repayment in equal monthly payments over a period of 60 months, unless the borrower elects to pay the amount in a lump sum up-front or over a shorter period (not less than 12 months).
In addition, Fannie Mae updated the payment deferral agreement to include requirements related to the repayment of any escrow shortage amount.
The updated requirements are effective March 1, 2022 (servicers are, however, encouraged to implement the revisions immediately.)
Click to view the Fannie Mae Payment Deferral Agreement: https://www.tenaco.com/wp-content/uploads/2021/11/Fannie-Mae-Payment-Deferral-Agreement-11-17-21.pdf
Click to view the Update to Lender Letter LL-2021-27 https://www.tenaco.com/wp-content/uploads/2021/11/Fannie-Mae-Update-to-Lender-Letter-2021-07-11-17-21.pdf
