NMP TV Debuts Webinar Assisting With Forbearance Issues

NMP TV Debuts Webinar Assisting With Forbearance Issues

There are unique differences among credit bureaus and GSEs you need to know

BY PAMELA M. MARRON | CONTRIBUTING WRITER, NATIONAL MORTGAGE PROFESSIONAL

I was part of a webinar broadcast live on NMP TV (https://nmplink.com/c2h) in late May to explain how loan originators and real estate agents can engage with HUD housing counselors and credit counselors to assist challenged clients. A tab for COVID-19 was added to include up-to-date mortgage industry information.

Mortgage professionals have many questions about how credit reporting and scoring will be done on a forbearance so that they can assist clients to recover more quickly with needed refinancing.

An issue that may hinder mortgage holders is that some form of forbearance remark is often noted on a mortgage account even if the holder simply inquired about a forbearance. My experience with this issue is that in the first month after the forbearance is inquired about, and even when the client’s account has the forbearance remark, it is possible to continue with a refinance immediately as long as the client qualifies. I have already received a Fannie Mae Approve/Eligible and a Freddie Mac Eligible/Accept in both GSE automated underwriting systems for two clients where staying current after a forbearance inquiry was the case.

Fannie Mae’s May 19 press release states there is no waiting period for borrowers who missed payments due to a COVID-19 financial hardship, but have since completed reinstatement by repaying the full amount of the outstanding payments missed during the forbearance period. There also is no waiting period for borrowers who requested forbearance due to a COVID-19 financial hardship but ultimately were able to make all their payments in full and on time. Freddie Mac also follows these guidelines.

MERIDIAN LINK AND FREDDIE MAC CREDIT INFILE

Here are unique differences in credit remarks found among Equifax, Trans Union and Experian on the Meridian Link platform and on Freddie Mac Credit Infiles for a mortgage where the client inquired about a forbearance, but continued to pay and for a student loan where the payment was automatically put into forbearance. Both started on the April payment.

On the tri-merged credit report, one mortgage creditor line shows “Account In Forbearance; Payment Deferred” for all three credit bureaus and “No Lates” shown for the account. For the student loans, “Payment Deferred” shows up and “No Lates” show.

On the Meridian Link platform, for mortgages, student loans and any account the client may have put into forbearance, click on the link to the far right that shows XP/TU/EF. This link opens to a new page and separates out individual credit for Experian, Trans Union and Equifax credit bureaus.

Freddie Mac Credit Infiles ordered separately in Loan Prospect Advisor shows more variations for forbearance on each credit bureau:

EXPERIAN

• Mortgage does not show “Forbearance” in remarks.

• Open student loans shows “Student Loan Payment Deferred.”

EQUIFAX

• Mortgage states “Unknown Code: KW.”

• Open student loans showing “Payment deferred.”

TRANSUNION

• Mortgage states “Unknown Code: FOR.”

• Open student loans show “No Remarks.”

If you have a client that you are having trouble getting approved where forbearance was inquired about, but payments continued to be made, please contact me via email Pam.M.Marron@gmail. com. Consumers can also dispute inaccurate forbearance credit remarks with the Consumer Financial Protection Bureau and the individual credit furnisher.

Also, I have heard from more than one client that government student loans have automatically been deferred without the loan holder requesting a deferment.

Stay tuned.

Pamela M. Marron is a senior loan originator with Innovative Mortgage Services Inc.