What are mortgage insurance termination requirements when verifying an acceptable payment record for borrowers who that experience a financial hardship related to COVID-19?

NOTE: The response to this Q&A is directly from Fannie Mae Lender Letter (LL-2020-02), Impact of COVID-19 on Servicing.

When verifying an acceptable payment record for a borrower that has had a financial hardship related to COVID-19 in which the
servicer provided

▪ a COVID-19 related forbearance plan, repayment plan, or Trial Period Plan and the borrower complied with the terms of
such plan;
▪ a payment deferral; or
▪ a COVID-19 payment deferral and the borrower made three consecutive monthly payments following completion of the
payment deferral,

the servicer must not consider any payment that is 30 or more days past due in the last 12 months, or 60 or more days past due in the
last 24 months that is attributable to the COVID-19 financial hardship. The mortgage loan must be current when the termination is
requested, which means the mortgage loan payment for the month preceding the date of the termination request was paid.

This policy change is effective for borrower-initiated requests for termination initiated through Fannie Mae’s servicing solutions
system on or after March 1, 2021. For assistance prior to that date, contact loss_mitigation@fanniemae.com.

 

For more information see Fannie Mae Lender Letter (LL-2020-02), Impact of COVID-19 on Servicing.