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Clarification Regarding the Review of Borrowers in a Pandemic-Related Forbearance for a COVID-19 Loss Mitigation Option

May 25, 2021 Print ShareThis

It has been brought to the attention of the Federal Housing Administration (FHA) that some mortgagees and others are unclear about when it is appropriate to begin reviewing borrowers for COVID-19 loss mitigation options.

FHA requires that mortgagees review borrowers for the COVID-19 loss mitigation options upon the completion or expiration of the borrower’s forbearance period; however, as clarification, it is permissible for mortgagees to begin reviewing borrowers for COVID-19 loss mitigation options at any point prior to the completion or expiration of their COVID-19 or other pandemic-related forbearance period. Further, a borrower does not need to exit forbearance to be reviewed for a COVID-19 loss mitigation option.

FHA encourages mortgagees to review borrowers for available COVID-19 loss mitigation options as soon as practicable as these options are designed to help borrowers resolve their delinquencies and avoid foreclosure.

Tags: COVID-19 Housing Counseling Program