For a borrower’s monthly payment to be considered in imminent default for the purpose of determining eligibility for a conventional mortgage loan modification, the borrower must satisfy
the initial eligibility criteria, and
either the credit or hardship eligibility criteria.
The servicer must take the steps in the following table to perform the imminent default evaluation.
|1||Determine if all initial eligibility criteria are satisfied.|
|✓||Initial Eligibility Criteria|
|The mortgage loan is current or less than 60 days delinquent as of the evaluation date.|
|The property securing the mortgage loan is occupied as a principal residence by at least one borrower.|
|The borrower submits a complete BRP (see D2-2-05, Receiving a Borrower Response Package for additional information).|
|The borrower’s non-retirement cash reserves are less than $25,000 based on information provided in the Mortgage Assistance Application (Form 710), or equivalent.|
|The borrower has a hardship as documented in accordance with Form 710, or equivalent.
Note: An increased monthly P&I payment that has occurred as a result of an interest rate adjustment within the last 12 months for a previously modified mortgage loan with a step-rate feature is an acceptable hardship.
|2||Determine if either the credit or hardship eligibility criteria is satisfied.|
|Credit||A FICO credit score less than or equal to 620, and either
Note: The FICO credit score must be no more than 90 days old as of the date of evaluation. If the servicer obtains multiple credit scores for a single borrower, it must select a representative credit score using the lower of two or the middle of three credit scores. If there are multiple borrowers, the servicer must determine the representative score for each borrower and use the lowest representative score as the credit score for the evaluation.
|Hardship||The borrower has one of the following hardships as documented in accordance with Form 710, or equivalent:
For more information please see Servicing Guide D2-1-01, Determining if the Borrower's Mortgage Payment is in Imminent Default.