Retention Options

A mortgage forbearance plan is an agreement between the mortgage servicer and the homeowner to pause or reduce monthly mortgage payments for a certain period, allowing homeowners to resolve their short-term hardship.

Learn more about forbearance.

A payment deferral adds (defers) missed payments (principal and interest) to the end of the mortgage loan term as a non-interest bearing balance. The balance is due at the maturity date or earlier upon the sale or transfer of the property, refinance of the mortgage loan, or payoff of the interest-bearing balance of the loan. Upon completing the payment deferral, the homeowner continues paying their regular monthly mortgage payment in accordance with its terms. View payment deferral overview. 

A loan modification might be available to eligible borrowers who have experienced a permanent or long-term hardship and whose loans are delinquent, or  are determined to be in imminent default in accordance with the Servicing Guide.

The Flex Modification offers eligible homeowners mortgage payment relief:

• For borrowers less than 90 days delinquent, the modification requires a complete Borrower Response Package and targets a 20% principal and interest payment reduction and 40% housing expense-to-income ratio.
• For eligible borrowers 90 or more days delinquent, the modification targets a 20% payment reduction and requires no Borrower Response Package.

The Flex Modification may result in some principal forbearance in accordance with F-1-27 of the Servicing Guide.

Read Lender Letter LL-2024-02 Updates to Determining the Flex Modification Terms, which expands borrower eligibility and provides more equitable payment reduction to eligible borrowers. Servicers may implement these changes starting Nov. 1 but must implement them by Dec. 1.

Learn more about Flex Modification.

Help Borrowers Avoid Foreclosure

• Fannie Mae.com consumer website explains the range of options available to homeowners in extraordinary circumstances and provides guidance on how to seek help.

Managing Default-Related Legal Services

Resources are available to assist in default-related legal services.

• Conducting Default-Related Law Firm Compliance Reviews FAQs
• Excess Attorney Fee/Cost Guidelines
• Allowable Title Cost for Fannie Mae Foreclosures
• Mortgage Default Counsel Retention Agreement Amendment 2018-3 - 8/2/18
• Mortgage Default Counsel Retention Agreement Amendment 2018-2 - 6/6/18
• Mortgage Default Counsel Retention Agreement Amendment 2018-01 - 4/18/18
• Mortgage Default Counsel Retention Agreement
• Schedule of Legal Fees and Costs  
• Amendment 2023-02 to Fannie Mae MDC Retention Agreement – 10/30/2023
• Amendment 2023-01 to Fannie Mae MDC Retention Agreement – 08/03/2023
• Amendment 2022-03 to Fannie Mae MDC Retention Agreement – 09/13/2022
• Amendment 2022-02 to Fannie Mae MDC Retention Agreement – 06/29/2022
• Amendment 2022-01 to Fannie Mae MDC Retention Agreement – 01/05/2022