Servicing Guide

Published November 10, 2020

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What is the workout hierarchy for a when a borrower is affected by a disaster event?

If the servicer determines that the borrower is unable to resolve a delinquency resulting from a disaster-related hardship through a reinstatement and cannot afford a repayment plan, the servicer must evaluate the borrower for a retention workout option in accordance with the following table.

If the servicer... Then the servicer must evaluate the borrower affected by the disaster event...
achieves QRPC with the borrower, regardless of whether the borrower was on a disaster-related forbearance plan in accordance with the steps in the following table
Step Servicer Action
1 Evaluate the borrower for a disaster payment deferral in accordance with Determining Eligibility for a Disaster Payment Deferral in D2-3.2-06, Disaster Payment Deferral
If... Then the servicer must...
the mortgage loan is eligible offer a disaster payment deferral.
the servicer determines that the borrower is not capable of maintaining the current contractual monthly PITI payment, or the mortgage loan is greater than 12 months delinquent proceed to step 2
2 Evaluate the borrower for a Fannie Mae Flex Modification in accordance with the reduced eligibility criteria within Evaluating or Soliciting a Borrower with a Disaster-Related Hardship for a Fannie Mae Flex Modification in D2-3.2-07, Fannie Mae Flex Modification
If the mortgage loan is... Then the servicer must...
eligible offer a Fannie Mae Flex Modification
two or more months delinquent at the time the disaster occurred, or less than 90 days delinquent proceed to step 3
3 Evaluate the borrower for a Fannie Mae Flex Modification in accordance with D2-3.2-07, Fannie Mae Flex Modification
If the mortgage loan is... Then the servicer must...
eligible offer a Fannie Mae Flex Modification.
not eligible evaluate the borrower for a Fannie Mae Short Sale (see D2-3.3-01, Fannie Mae Short Sale or a Fannie Mae Mortgage Release (see D2-3.3-02, Fannie Mae Mortgage Release (Deed-in-Lieu of  Foreclosure).  
does not achieve QRPC with a borrower who is on a disaster-related forbearance plan prior to the expiration of the plan in accordance with the steps in the following table
Step Servicer Action
1 Evaluate the borrower for a disaster payment deferral in accordance with Determining Eligibility for a Disaster Payment Deferral in D2-3.2-06, Disaster Payment Deferral
If the mortgage loan is... Then the servicer must...
eligible solicit the borrower for a disaster payment deferral in accordance with Soliciting the Borrower for a Post-Forbearance Disaster Payment Deferral in D2-3.2-06, Disaster Payment Deferral .
greater than 12 months proceed to step 2.
2 Evaluate the borrower for a Fannie Mae Flex Modification in accordance with the reduced eligibility criteria within Evaluating or Soliciting a Borrower with a Disaster-Related Hardship for a Fannie Mae Flex Modification in D2-3.2-07, Fannie Mae Flex Modification
If the mortgage loan is... Then the servicer must...
eligible offer a Fannie Mae Flex Modification.
two or more months delinquent at the time the disaster occurred proceed to step 3
3 Evaluate the borrower for a Fannie Mae Flex Modification in accordance with D2-3.2-07, Fannie Mae Flex Modification
If the mortgage loan is... Then the servicer must...
90 days or more delinquent and the borrower is otherwise eligible solicit the borrower a Fannie Mae Flex Modification in accordance with Soliciting the Borrower for a Fannie Mae Flex Modification in D2-3.2-07, Fannie Mae Flex Modification
not eligible continue attempts to achieve QRPC in accordance with D2-2-02, Outbound Contact Attempt Requirements

Note: If the borrower doesn't respond to the disaster payment deferral offer as described in Soliciting the Borrower for a Post-Forbearance Disaster Payment Deferral in D2-3.2-06, Disaster Payment Deferral by the acceptance date provided in the disaster payment deferral agreement, then the servicer must evaluate the borrower in accordance with Evaluating or Soliciting a Borrower with a Disaster-Related Hardship for a Fannie Mae Flex Modification in D2-3.2-07, Fannie Mae Flex Modification

does not achieve QRPC with a borrower who was not on a disaster-related forbearance plan prior to the expiration of the plan for a Fannie Mae Flex Modification in accordance with D2-3.2-07, Fannie Mae Flex Modification and take action in accordance with the following table.
If the mortgage loan is... Then the servicer must...
90 or more days delinquent and the borrower is otherwise eligible solicit the borrower a Fannie Mae Flex Modification in accordance with Soliciting the Borrower for a Fannie Mae Flex Modification in D2-3.2-07, Fannie Mae Flex Modification
not eligible continue attempts to achieve QRPC in accordance with D2-2-02, Outbound Contact Attempt Requirements

For more information, please see Servicing Guide D1-3-01: Evaluating the Impact of a Disaster Event and Assisting a Borrower.

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