(All Loans) Borrowers who are currently in a forbearance plan/mortgage relief option, have requested forbearance/mortgage relief option (verbally or in writing), or are pending acceptance of a forbearance plan/mortgage relief option (verbally or in writing), are ineligible.
Conventional Loan Forbearance Policy
This policy update has been temporarily enacted for borrowers specifically impacted by the COVID-19 pandemic.
When there is knowledge that the borrower entered forbearance on any mortgage obligation (including co-signed loans and loans not related to the subject transaction) based on information obtained on their credit report or direct acknowledgment, there are two methods for resolution of the forbearance that will allow the borrower to proceed with a new loan:
- 1. Reinstatement (no longer in repayment plan) – If the borrower resolved their missed payments through a reinstatement, and are up-to-date on payments other than the current month, they are eligible for a new loan. If the loan was reinstated on or after the application received date but prior to the note date, the borrower must document the source of funds used for reinstatement.
- 2. Loss Mitigation Solution– The borrower is eligible for a new mortgage loan if they have made at least three (3) timely payments as of the note date of the new transactions, and outstanding payments will be or have been resolved through a loss mitigation solution:
- a. If on a repayment plan: the borrower must have made either three payments under the repayment plan or completed the repayment plan, whichever occurs first.
- b. For a payment deferral: the borrower must have made three consecutive timely payments following the effective date of the payment deferral agreement
- c. For a modification: the borrower must have successfully completed the three month trial payment period
- d. For any other loss mitigation solution not listed above: the borrower must have successfully completed the program or made three consecutive full payments in accordance with the program.
Note: For items 2: a-d: There is not a requirement for the plan to be completed, however the borrower cannot have missed any payments due under the plan.
To be eligible, the borrower must be current on their mortgage. For purposes of the requirements, “current” means the borrower has made all mortgage payments due in the month prior to the note date of the new loan transaction by no later than the last business day of the month.
Loan Payment Verification
An updated credit report or credit supplement alone is not sufficient to verify a loan is current. In addition to reviewing the credit report, one of the following methods of verification is required:
A loan payment history from the servicer or third party verification service
A payoff statement (for refinance transactions)
The latest mortgage account statement from the borrower, or
A Verification of Mortgage
Note: The above policy does not apply to HIGH LTV refinance loans (LTV greater than 95%).