Piggy-backing payment deferral success from the pandemic, the Federal Housing Finance Agency (FHFA) just announced that beginning July 1, 2023, Fannie Mae and Freddie Mac can offer borrowers under financial duress, a six-month reprieve through payment deferral. As usual, there are nuances that accompany eligibility, but the benefit is that borrowers can continue to make the same monthly mortgage payment while deferring past due amounts to the end of the loan. Good news for servicers and homeowners alike as servicers will be able to access this program by way of Fannie Mae and Freddie Mac’s standard loss mitigation toolkits.
Borrower Requirements for Eligibility
Like any new program option, there are lots of rules to incorporate into your process and systems. So, let’s dig into the criteria. The homeowner must be either 30 or 60 days past due. In other words, they’ve not missed more than two mortgage payments. The past-due status must remain unchanged for a minimum of three consecutive months, which includes the evaluation month. The borrower has to make their full monthly payment during the evaluation month. The hardship that led to delinquency must be resolved. The borrower should show the capacity to continue making the regular monthly payments going forward. The borrower cannot be in a position to reinstate their loan nor afford a repayment plan. There should be no previous payment deferral, no active forbearance, no repayment plan or Trial Period Plan, and no outstanding offer for an alternative workout option, as well as no recourse or indemnification arrangements in place. The borrower may not have been modified with a non-disaster modification or have failed a non-disaster related modification Trial Period Plan within the past year. If the borrower previously received a HAMP modification, `then any future HAMP incentive will be forfeited. The mortgage may be fixed-rate, step-rate, or adjustable rate. The loan must have originated 12 or more months prior to evaluation. The property can be vacant or even condemned.
Are You Ready to Assist?
Are you ready to incorporate this new opportunity for your distressed borrowers and yet again change your operational processes? You may have some of the logic established as a result of COVID-19 assistance options, but how quickly, accurately, and broadly can you incorporate payment deferrals? We work in an environment that necessitates nimble and responsive reactions to change. Many of your borrowers are only recently coming out from under the pandemic impact and now sit squarely in front of recessionary pressure. Making certain that you’re ready to assist these borrowers means your processes and systems are prepared to ingest change across the board. Simultaneously these systems need to be prepared to update borrower access to benefits and program enhancements within defined parameters, along with managing your bottom-line costs to service.
How CLARIFIRE Helps to Meet This Challenge
Keeping up with change is a requirement in today’s servicing environment. However, it involves significantly more prowess and technical expertise than in the past. Additionally, with rising interest rates, staying abreast of evolving programs and processes requires the incorporation of serious, yet cost-effective innovation, throughout your organization. CLARIFIRE® can help you meet this challenge. Your organization starts eliminating unnecessary processes and costs immediately with CLARIFIRE while offering your borrowers 24/7 real-time digital access to the information they want and need. Envision capabilities that assist distressed borrowers through self-serve access that is supported by modern process automation, complex workout decisioning, and easy-to-use business rules management. CLARIFIRE informs and guides your borrowers while collecting the data needed to automate smart responses from application through eligibility determination and even workout completion. Available from any mobile device, CLARIFIRE delivers end-to-end automation that creates a seamless servicing environment for your operations team and your borrowers.
Take Action Today!
Don’t wait for increasing costs, rising interest rates, or decreasing MSR values to beat up your bottom line. Take action today with CLARIFIRE. Let us show you how to integrate FHFA’s latest workout option, as well as meet FHFA’s increasing pressure on servicers to embrace Fintech solutions. CLARIFIRE incorporates decades of experience in mortgage servicing automation and offers cutting-edge solutions that surpass our competition. Find out how you can experience the benefits of seamless servicing today with CLARIFIRE, delivering advanced end-to-end servicing workflows, automated workout underwriting, and digital integrations that expand your operational reach. Contact us at eClarifire.com or directly at 866.222.3370. CLARIFIRE, truly BRIGHTER AUTOMATION®.
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