Compliance Hot Topic - Forbearance Agreement

August 19, 2021 BY MQMR Blogger

Does a Forbearance Agreement need to be sent to the customer?



While not all investors require forbearance agreements to be sent to a customer, certain investors such as Fannie Mae and Freddie Mac have issued statements, requiring the forbearance agreement to be sent to the customer. See Freddie Mac Bulletin 2020-10 (04/08/20) and Freddie Mac Guide Section 9203.13(c) and Guide Exhibit 93; Fannie Mae LL-2020-02 (04/08/20).


The announcement distributed by the CFPB on April 5, 2021, specifically states borrowers should be informed of their options and receive key information about those options. It’s also worth mentioning the announcement from the CFPB on April 1, 2021, warns Mortgage Servicers “Unprepared is Unacceptable.” This bulletin includes points such as ensuring borrowers have all necessary information for assistance and they will be looking at how servicers managed communications with borrowers.


MQMR recommends a best practice of always sending the forbearance agreement to the borrower, even in instances when it may not be required. Due to many complaints from borrowers, servicers can take a proactive approach by sending information to notify and educate the borrower of their options, provide what steps must be taken next by the borrower, and any details regarding forbearance and/or modifications agreed upon.