Freddie Mac Releases Bulletin on Eligible Disasters and Other Servicing Guidance Related to COVID-19

Weiner Brodsky Kider PC

Weiner Brodsky Kider PC

Freddie Mac recently issued Guide Bulletin 2020-28 (Guide Bulletin) announcing updates regarding eligible disasters and other servicing guidance related to COVID-19. 

Specifically, the Guide Bulletin provides updated guidance on: (i) eligible disasters; (ii) credit reporting requirements for borrowers impacted by an eligible disaster; (iii) a payment deferral program designed to assist borrowers who became delinquent due to a short-term hardship caused by an eligible disaster that has since been resolved (i.e., Disaster Payment Deferral); (iv) servicer incentives (e.g., extend modifications and capitalization and extension modifications); (v) insurance loss proceeds disbursements to borrowers impacted by COVID-19 hardships; (vi) electronic default reporting involving mortgages with an ongoing COVID-19 related hardship that are also impacted by an eligible disaster; and (vii) escrow shortage repayment periods following a COVID-19/Disaster Payment Deferral.

Notably, the Guide Bulletin updates the definition of “eligible disaster” to mean a financial hardship that impacts the borrower’s ability to pay his or her current contractual monthly payment, and either: (i) the property securing the mortgage loan experienced an insured loss; (ii) the property securing the mortgage loan is located in a FEMA-Declared Disaster Area eligible for individual assistance; or (iii) the borrower’s place of employment is located in a FEMA-Declared Disaster Area eligible for individual assistance.

With the exception of the provisions regarding the Disaster Payment Deferral (which become effective on October 1, 2020), the changes announced in the Guide Bulletin are effective immediately.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Weiner Brodsky Kider PC | Attorney Advertising

Written by:

Weiner Brodsky Kider PC

Weiner Brodsky Kider PC on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.