Payment Deferral Solutions
Payment deferral is a servicing relief and loss mitigation solution designed to resolve delinquencies and help homeowners remain in their homes. Payment deferrals address a unique hardship situation – homeowners with a resolved short-term hardship who are financially capable of resuming their previous mortgage payments, but who are unable to reinstate their mortgage or afford a repayment plan.
On March 29, 2023, the Single-Family Seller/Servicer Guide (Guide) Bulletin 2023-8 announced an upcoming expansion to the Payment Deferral program. Under the expanded criteria, payment deferrals are available to eligible homeowners who are between 60-180 days delinquent; however, homeowners who are 30 days delinquent are ineligible. In addition, borrowers are longer be required to make consecutive monthly payments prior to completing a payment deferral. The mandatory effective date for these changes is October 1, 2023. However, Servicers can use Resolve® to process payment deferrals with the new criteria as of July 1, 2023, the initial date of the transition period. Servicers using Resolve® who have not implemented the expanded payment deferral terms by July 1, 2023, can continue to process the pre-expanded terms through Resolve® until the October 1, 2023, the mandatory effective date for the expanded Payment Deferral program.
Workout Prospector® will not be updated with the new criteria. Servicers who are not yet using Resolve® can continue offering and settling pre-expanded payment deferral terms through Workout Prospector until they transition to Resolve® or until the October 1, 2023, mandatory effective date for the expanded Payment Deferral program.
Freddie Mac will monitor Servicers’ requests for approving, offering and settling workouts that don’t align with program parameters (pre-expanded or expanded Payment Deferral program terms). As a reminder, all quality assurance (QA) and related remedies still apply (e.g., Guide Section 3501.1).
Payment Deferral Programs
Freddie Mac offers three payment deferral solutions
- Payment Deferral
- COVID-19 Payment Deferral
- Disaster Payment Deferral
Each Payment Deferral solution shares the following requirements:
- A homeowner’s hardship has been resolved.
- A repayment plan or full reinstatement of the mortgage is not a viable option to cure the delinquency.
- Quality Right Party Contact (QRPC) has been established.
- The homeowner has the financial capacity to continue making the existing contractual monthly mortgage payment and does not require a payment reduction.
Key Differences Between Payment Deferral Plans
|Payment Deferral||COVID-19 Payment Deferral||Disaster Payment Deferral||Payment Deferral
(Available as of July 1, 2023)
|Evaluations must begin||January 1, 2021||July 1, 2020||October 1, 2020||October 1, 2023|
|Hardship||Eligible short-term hardship that has since been resolved||COVID-19 related hardship that has since been resolved||Disaster related hardship that has since been resolved||Eligible short-term hardship that has since been resolved|
|Deferral term||2 months of deferred payment||Up to 18 months of deferred payment||Up to 12 months of deferred payment||Up to 12 months of deferred principal and interest payments, including deferred amounts from previous non-disaster-related payment deferrals|
|Borrower eligibility||Borrower must be 30- or 60- days delinquent and have made, at minimum, two consecutive monthly payments, resulting in the delinquency status remaining unchanged for at least three consecutive months.||Current or less than 2 months delinquent as of March 1, 2020, the effective date of the National Emergency declaration related to COVID-19, and be equal to or greater than one month but less than or equal to 18 months delinquent as of the date of evaluation.||Borrower must have been current or less than 60 days (i.e. less than two months) delinquent as of the date of the disaster.||Borrower must be at least 60 days delinquent but less than or equal to 180 days delinquent as of the evaluation date.|
|Learn more||Guide Bulletin 2021-8 COVID-19 Servicing: Guidance for Helping Impacted Borrowers||Guide Bulletin 2020-28 Guide Section 9203.26 Disaster Relief||Guide Bulletin 2023-8|