MPF Update and COVID-19 Servicing Guidance for FHLBank Chicago MPF Traditional Loans

  • April 9, 2021
MPF Xtra® - Eligibility of Loans Secured by Investment Properties and Second Homes

On March 23, 2021, Mortgage Partnership Finance® (MPF®) published an announcement in regards to Fannie Mae’s Lender Letter LL-2021-08 communicating a 7% threshold on investment property and second home loans in addition to eligibility requirements for these mortgage loans. The Federal Home Loan Bank of Chicago (FHLBank Chicago) will assess Participating Financial Institutions’ (PFIs) concentration by unpaid principal balance (UPB) sold in these categories on a rolling 52-week basis going forward. PFIs who exceed this threshold will be contacted by FHLBank Chicago to discuss their plans to lower their concentration of investment properties and second homes. The MPF Program and FHLBank Chicago are working to determine what resources will be provided to PFIs to help manage their concentration and will provide additional information to PFIs in the near future.

MPF Traditional – Eligibility of Loans Secured by Investment Properties and Second Homes

Currently, investment properties are ineligible under the MPF Traditional (Conventional) product, while second homes are eligible for delivery. There are no plans to institute a limit similar to the one announced by Fannie Mae on loans secured by a second home at this time. Should this change in the future, PFIs will be notified.

Late Reporting Fees Reminder

Loans that are 30 days or more delinquent as of the last day of the preceding month and any loan in active Bankruptcy, regardless of current status, must be reported via eMAQCS® Plus monthly using the format in the Delinquent Mortgage & Bankruptcy Status Report (Exhibit B).

Effective with the reports required to be submitted in April 2021, each occurrence of a late or incomplete Monthly Accounting Report or Delinquent Mortgage & Bankruptcy Status Report will be subject to a late reporting fee in accordance to Section 2.14.3 – Late Reporting Fee of the applicable MPF Product Servicing Guide. Review the MPF Program Reminds Servicers of Late Reporting Fees for links to additional resources.

COVID-19 Servicing Update for MPF Traditional (Conventional)

As borrowers approach a cumulative forbearance plan term of 12 months, many servicers are experiencing delays in connecting with borrowers to evaluate them for forbearance extension or other workout options. In an effort to assist our members through these unprecedented circumstances, FHLBank Chicago continues to provide additional accommodations and reminders for the MPF Traditional loans.

COVID-19 Forbearance Plans (Conventional)

For mortgage loans actively performing on a COVID-19 related forbearance plan as of March 25, 2021 that are nearing the a cumulative forbearance plan term of 12 months, where the Borrower’s hardship has not been resolved and Qualified Right Party Contact (QRPC) has been achieved, the Servicer is authorized to grant extensions of the forbearance plan term in increments of up to three months, not to exceed accumulative total forbearance period of 18 months (calculated from the initial granting of the forbearance plan) without obtaining MPF Bank approval, if permitted by law. Please see the Extending Forbearance Plan Past 12 Months announcement for more details.

COVID-19 Payment Deferral Plan (Conventional)

FHLBank Chicago will allow Servicers to defer up to 18 months of mortgage payments into a payment deferral agreement. Servicers are required to upload the following completed items to eMAQCS Plus:
QRPC Accommodations and Reminders
  • Servicers are expected to begin attempts to contact the Borrowers who have been granted a forbearance plan in response to COVID-19 no later than 30 days prior to the expiration of the forbearance plan term in order to complete an assessment of each Mortgage Loan to determine the appropriate workout alternative that best fits the Borrower’s circumstances and determine what loss mitigation option is appropriate. For more information on QRPC, see the MPF announcement.
  • The Servicer must achieve QRPC with the Borrower prior to offering a forbearance plan.
  • Servicers are reminded that any extension to a cumulative forbearance plan term of 12 months period and/or changes to the forbearance agreement should be completed pursuant to applicable laws.
  • PFIs and Servicers are required to abide by any/all federal or state laws as well as the most recent COVID-19 related servicing guidance for MPF Traditional (Conventional) loans published by the MPF Program.
Loans Other Than MPF Traditional (Conventional)

MPF Government loans and MPF Government MBS loans must follow relief policies and guidance issued by the applicable Government Agencies.

MPF Xtra loans must follow relief policies and guidance issued by Fannie Mae.

We’re Here to Help

For MPF product and operational support questions, please contact the MPF Sales Support Team at mpfsales@fhlbc.com.

Contact Us

Please direct all media and investor inquiries to:

Erin Kopecky
Vice President, Director, Communications
ekopecky@fhlbc.com
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12.833.5323