The Federal Housing Administration published Mortgagee Letter 2020-30, which provides underwriting guidelines for homeowners who were granted a mortgage forbearance due to the COVID-19 National Emergency.
Additionally, ML 2020-30 defines the requirements that borrowers must meet to request a new FHA-insured mortgage after successfully completing their mortgage payment forbearance period. Details from the mortgagee letter were summarized in FHA Info #20-66.
Borrowers granted mortgage payment forbearance may be eligible for a new FHA-insured mortgage provided they:
- continued to make regularly scheduled mortgage payments and the forbearance is terminated; or
- completed forbearance and made at least 12 consecutive monthly mortgage payments after forbearance or cash-out refinances; or
- completed forbearance and made at least three consecutive monthly mortgage payments after forbearance for purchase mortgages and no cash-out refinances; or
- completed forbearance and made less than three consecutive monthly mortgage payments after forbearance for credit qualifying streamline refinances.
If a borrower entered into a modification agreement on an FHA mortgage, they must have made six payments under the modification to be eligible for a streamline refinance.
This guidance applies to single family forward mortgage programs only and updates requirements in the Single Family Housing Policy Handbook 4000.1 (SF Handbook) as indicated in the ML. These updates will be incorporated into the applicable sections of the SF Handbook in the coming months.
In addition to the forbearance guidance, FHA Info #20-66 announced software updates to the Home Equity Reverse Mortgage Information Technology (HERMIT) system to allows servicers to submit extensions related to the Presidentially-Declared COVID-19 National Emergency.
The extension of the foreclosure and eviction moratorium was published on August 27 in Mortgagee Letter 2020-27.
Servicers are required to use the COVID-19 extensions for HECMs per the details in HERMIT System Changes – Release 6.1 immediately. In addition, stakeholders should review the HERMIT User Guide and the HERMIT System & Resources for more information.