The Federal Housing Administration publicized the availability of a new Default Reason Code in the Single Family Default Monitoring System (SFDMS) to ensure that loss mitigation actions that result from the COVID-19 National Emergency are accurately recorded.
Mortgagees must follow the loss mitigation guidance in Mortgagee Letter 2020-06 and begin using the new Default Reason Code 055 – Related to National Emergency Declaration, as soon as possible.
This new Default Reason Code is available beginning May 1, 2020, for the April 2020 reporting cycle. Mortgagees unable to use Code 055 should, instead, report using Code 010 – Neighborhood Problem, for the April cycle. In addition, if the mortgage is newly defaulted (i.e., no open default episode), mortgagees are reminded to report Status Code 42 – Delinquent, and then Status Code 06 – Formal Forbearance.