FHA issued Mortgagee Letter 2021-15 to establish the new COVID-19 Advance Loan Modification option, to extend the COVID-19 foreclosure and eviction moratorium, and to expand the COVID-19 forbearance and HECM extensions. Per the Mortgagee Letter, FHA established a new Advance Loan Modification (COVID-19 ALM) option that offers borrowers the opportunity for a 30-year rate and term mortgage modification that will bring the mortgage current and reduce the principal and interest portion of the monthly mortgage payment by at least 25%. The COVID-19 ALM is available for borrowers who are currently 90 or more days delinquent, or at the end of their COVID-19 Forbearance. Servicers are required to review their FHA-insured servicing portfolios and proactively reach out to borrowers who meet the criteria for the COVID-19 ALM.
In addition, FHA:
- extended the foreclosure and eviction moratorium to July 31, 2021, and the deadline for the first legal action and the Reasonable Diligence Time Frame to 180 days;
- extended the COVID-19 Forbearance start date and HECM extension period to September 30, 2021;
- provided an additional 3-month extension to the COVID-19 forbearance for borrowers that began the initial forbearance between July 1, 2020 and September 30, 2020; and
- provided an additional 3-month extension to HECM borrowers with an initial HECM extension period that began between July 1, 2020 and September 30, 2020.
The Mortgage Letter is effective immediately.
Click to view the FHA Mortgagee Letter 2021-15: https://www.tenaco.com/wp-content/uploads/2021/06/FHA-Mortgagee-Letter-2021-15.pdf
