DATE: May 27, 2020 In response to current market conditions due to the COVID-19 pandemic, REMN Wholesale is announcing a forbearance loan policy. This policy is effective immediately and applies to both new submissions and loans currently in the pipeline.
Overview
REMN Wholesale’s forbearance policy:
- Gives direction for transactions where the borrower is in a forbearance repayment plan
- Applies to ALL mortgage loans the borrower is obligated for, including both the subject property and other real estate owned
- Applies ALL mortgage loans the borrower is obligated for, including loans where the borrower acted as a co-signor on the Note
- Applies to ALL loan programs offered by REMN Wholesale including Fannie Mae, Freddie Mac, FHA, USDA, and VA
Forbearance Policy
Forbearance can occur when the borrower directly requests forbearance and is in a forbearance plan OR the borrower makes a forbearance inquiry with their loan servicer and the servicer flags the inquiry. In either situation, the written documentation in the below policy is required from the servicer
1. For loans in which the borrower is currently in forbearance and has never missed a payment, and is only due for the current month, the loan is eligible
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- This includes all products.
- For mortgages on dwellings other than the subject property, REMN must receive a verification form the servicer that the forbearance plan has been cancelled before the subject loan can close.
- For mortgages on the subject property, if there is a 2nd lien that will be subordinated that was in forbearance, the plan must be cancelled prior to the closing of the subject loan.
2. For loans in which the borrower is currently in forbearance and has missed payments but will REINSTATE the mortgage prior to the closing of the subject loan, the loan is eligible if the product is FNMA/ FHLMC
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- FHA, USDA and VA are ineligible – therefore these loan types must meet the housing history requirements of the agency, as they exist in the respective manual.
- This option is NOT available for the FNMA “High LTV Refinance” or FHLMC “Enhanced Relief Refinance” Product.
- The borrower must reinstate the mortgage, with their own funds, prior to the closing of the subject loan.
- For refinance transactions, the borrower is not permitted to use any of the refinance proceeds to reinstate the loan.
- The payoff cannot include any deferred or missed payments.
- The borrower cannot use any proceeds from a cash out transaction to reinstate the mortgage on other real estate owned.
- REMN must receive written verification from the servicer that the forbearance plan has been cancelled prior to the closing of the subject property.
- The funds used must be the borrower’s own funds which are properly sourced and seasoned.
3. For loans in which the borrower has missed payments and is in a LOSS MITIGATION SOLUTION with the servicer, the loan is eligible if the product is FNMA/FHLMC and the borrower has made three (3) timely payments
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- This includes: Repayment Plans, Payment Deferral Plans, Loan Modifications, and Other Loss Mitigation Solution approved by the servicer
- FHA, USDA and VA are ineligible.
- This option is NOT available for the FNMA “High LTV Refinance” or FHLMC “Enhanced Relief Refinance” Product.
- Once the three (3) timely repayments, as defined below, have been met, the subject mortgage CAN include the full amount required to satisfy the existing loan.
- The three payments are as of the Note date of the subject loan.
- Repayment Plan:
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- 3 payments – OR – completion of the plan, whichever occurs first
- Payment Deferral Plan:
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- 3 consecutive payments following the effective date of the plan
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- Modification:
- Completed the three-month trial payment period
- Other Loss Mitigation
- 3 consecutive payments – or – completion of the plan
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4. For loans in which the borrower is in forbearance and cannot reinstate the loan and/or cannot satisfy the requirements of the loss mitigation solutions, the loan is ineligible for all.
Please contact your Account Executive with questions.