COVID-19 FAQs Selling - Selling Loans In Forbearance
Last Updated: May 05, 2020
In response to the COVID-19 national emergency, Fannie Mae and Freddie Mac have provided temporary guidance to lenders on several policy areas that support selling mortgage originations. These FAQs provide additional information on the temporary policies. We will be adding more FAQs, therefore we encourage you to check in frequently for updates - refer to the "NEW" or "UPDATED" notations after the question.
Does Fannie Mae purchase loans in forbearance?
Yes, certain loans that go into forbearance after loan closing and before sale to us are eligible for sale beginning May 1, 2020. Refer to Lender Letter LL-2020-06, Selling Loans in Forbearance Due to COVID-19 for eligibility and delivery requirements.
- What are the scenarios under which a lender should self-report a loan in forbearance? NEW
If a lender discovers a loan was in forbearance after the loan data was submitted to Loan Delivery but prior to the sale date (the date funds or the security is swapped), the lender must self-report the loan. These situations include:
- The loan was sold before Lender Letter LL-2020-06 was published or prior to May 1.
- The loan data was delivered after May 1 but did not include the SFC 919 because the borrower went into forbearance while the loan was in Fannie Mae acquisitions processing.
- The loan data was delivered after May 1 and the sale was consummated, but the loan data did not include the SFC 919.
- How does a lender self-report loans to Fannie Mae? NEW
All self-reporting takes place in Loan Quality Connect™. This includes creating and submitting the self-report, uploading all supporting documentation, and tracking a loan's status as we make a decision as to how to proceed. To facilitate the self-reporting process for COVID-19 loans, we added “COVID forbearance” to the selfreport reason menu in Loan Quality Connect. As a reminder, the lender must notify us within 30 days of identifying loans not eligible for delivery. Refer to D1-3-06, Lender Post-Closing Quality Control Reporting, Record Retention, and Audit, for all of our self-reporting requirements.
A Job Aid on how to self-report is available to assist lenders with this process.
- Are loans in forbearance eligible for the concurrent sale of servicing through the Servicing Marketplace (SMP)? NEW
Yes, but forbearance eligibility will vary by servicer. Some servicers may not purchase servicing for loans in forbearance. Lenders should confirm with their SMP servicers whether they are accepting servicing on loans in forbearance and review their servicer rate sheets for any adjustments or exclusions for SFC 919.
- Are loans in forbearance eligible for the concurrent sale of servicing through the Servicing Execution Tool (SET)? NEW
Loans in forbearance are ineligible for sale through SET.