Fannie Mae Limits Servicer Obligations to Advance Scheduled Payments to Four Months
In response to the national emergency, the Federal Housing Finance Agency (FHFA) published a news release on April 21, 2020, FHFA Addresses Servicer Liquidity Concerns, Announces Four Month Advance Obligation Limit for Loans in Forbearance. As a result of this announcement, at the direction of the FHFA and in alignment with Freddie Mac, Fannie Mae notified the market that we will update our practice regarding servicer obligations to advance scheduled payments for single-family mortgage loans.
Once implemented, servicers of scheduled/scheduled remittance loans will discontinue advancing principal and interest payments on delinquent loans, including loans in temporary payment forbearance, after they have advanced four consecutive missed monthly payments. At that point, Fannie Mae will make the missed scheduled principal and interest payments to the MBS trust for payment to MBS holders so long as the loan remains in the MBS trust.
Today, Fannie Mae announced to servicers in Lender Letter LL-2020-02 that these changes will become effective for August 2020 remittance activity (based on July 2020 reporting activity).
Learn more about what Fannie Mae is doing in response to the COVID-19 emergency on the Our Approach page.