Update: Forbearance, even COVID-related forbearance, always resents the waiting 36-month period before a Chenoa Fund second mortgage can be subordinated.
Clarification on COVID-19 Forbearance Agreements and Early Payment Default Penalties
For all FHA loans locked on or after February 2, 2020, CBC Mortgage Agency will not charge an EPD penalty to a correspondent if a borrower enters into a forbearance agreement due to COVID-19 during the contractual EPD period provided that following the forbearance period the borrower resumes on-time payments and is determined to qualify for a partial claim under Mortgagee Letter 20-06. On all conventional loans and FHA loans locked prior to February 2, 2020, assessment of EPD penalties will be handled on a case by case basis.
Borrowers Requesting Forbearance Agreements
For loans scheduled to be sold to CBC Mortgage Agency, to avoid any potential complications with a loan purchase, correspondents must consult with CBC Mortgage Agency prior to initiating a forbearance agreement with a borrower.
Thank you,
CBC Mortgage Agency