FHLBank Chicago will now allow loan modifications for MPF Traditional Government loans. Servicers are no longer required to repurchase these loans in order to facilitate a loan modification. Servicers should follow the guidance listed below for Government loans. Servicers must also follow the policies and guidance issued by the applicable Government Agencies.
- Servicers work independently with the borrower and the applicable Government Agency to negotiate the terms of the deferment or modification while protecting the guaranty or insurance.
- Servicers notify FHLBank Chicago of the agreed upon terms (see below). FHLBank Chicago will not review or approve the change of terms, as your role as the servicer is to ensure that the guaranty or insurance remains intact.*
- Servicers are required to submit Appendix B and an unexecuted draft agreement indicating the change of loan data for the purpose of updating systems only. FHLBank Chicago is relying on you in your role as the servicer to ensure the agreement is both enforceable and in compliance with the applicable Government Agency’s guidelines.
Notice of MPF Traditional Government loan modifications must be submitted to firstname.lastname@example.org. The following documents must be submitted by the 25th, or the prior business day if the 25th falls on a weekend or holiday, of the month in which the first payment under the payment deferral is due:
- Appendix B (COVID-19 Deferral Plan Worksheet)
- A draft (i.e., unsigned) agreement
- Twelve month payment history for the subject mortgage
As a reminder, MPF Government Mortgage-Backed Security (MBS) loans must follow the relief policies and guidance issued by the applicable Government Agencies.
*FHLBank Chicago reserves all rights under the PFI Agreement to require repurchase or other remedies if the loan modification or payment deferral negatively affects the applicable Government Agency’s guaranty or insurance.
For questions or to submit an MPF Traditional Government loan modification, please contact the MPF Sales Support team at email@example.com.