A forbearance plan is a retention option in our workout hierarchy for a borrower with an eligible hardship that is temporary in nature and has not been resolved. A forbearance plan provides for a period of reduced or suspended contractual monthly mortgage payments, followed by a full reinstatement, mortgage loan payoff, or another workout option to enable the borrower to resolve the delinquency. For more information see Servicing Guide D2-3.2-01, Forbearance Plan.
As a reminder, the servicer must inform the borrower that the payments which are the subject of a forbearance plan have only been delayed or reduced, not forgiven. The servicer must also inform the borrower that he or she may shorten a forbearance plan term at any time to reduce the amount of payments which are being delayed or reduced.
Please note that Fannie Mae has released COVID-19 specific guidelines related to forbearance plans in accordance with the CARES Act; see Lender Letter LL-2020-02, Impact of COVID-19 on Servicing.
See below for more information on COVID-19: