What are the available options for reporting an account that has regular payments temporarily postponed?
Temporary payment relief has become a high-scrutiny reporting area, especially when consumers enter short-term hardship arrangements. Metro 2® treats “temporary” relief as a short-term schedule change with a defined end date, not a permanent modification. The compliance objective is to ensure reporting reflects the actual contractual or agreed-upon requirements during the relief window, without rewriting prior history after the fact.
Definitions and context: what “temporary” means in Metro 2®
A temporary relief plan can include:
- No payments due for a period (payment holiday)
- Reduced payments
- Interest-only payments
- A structured pause that later resumes standard repayment
Metro 2® emphasizes that furnishers’ internal policies and compliance teams should define which approach to apply and how long, consistent with applicable federal and state guidance on consumers’ willingness and ability to repay.
Reporting option 1: Payment Holiday or Skip-a-Pay
This option is used when the account remains in its normal repayment structure, but payments are temporarily postponed or adjusted.
Key reporting standards include:
- Terms Frequency: continue the normal payment frequency (do not default to deferred).
- Scheduled Monthly Payment Amount: report the new payment due; if no payment is due, zero fill.
- Account Status: report the status that applies each month; if no payments are due, report Account Status 11.
- Payment History Profile (PHP): increment based on the prior month’s Account Status and preserve prior history.
- If no payments are due, increment PHP with “D” for those months.
Critical compliance point: if the consumer was delinquent going into the relief period and no payments are required during the relief period, Metro 2® instructs careful handling when repayment resumes:
- Account Status after relief should reflect the true delinquency state.
- Date of First Delinquency should generally preserve the original first delinquency date that led to the delinquent status (it should not be “reset” merely because the account was in a relief window).
Reporting option 2: Report the account as Deferred
If the relief arrangement fits deferred reporting, Metro 2® points to the dedicated deferred-account guidance. In general, deferred reporting relies on deferred indicators and specialized payment information, rather than “skip-a-pay” logic.
Reporting option 3: Report the account in Forbearance
This is typically used when a forbearance agreement applies during repayment and may include reduced, interest-only, or no payments depending on terms.
Compliance requirements and common pitfalls
- Do not retroactively “clean up” relief months. Metro 2® specifically warns not to update the PHP entries for the relief months after the plan ends.
- Do not use disaster indicators as a substitute. If a disaster is involved, a disaster comment may be optional narrative context, but it should not replace accurate relief-plan reporting logic.
- Align with documented procedures. Consistency is essential for audits and dispute outcomes, particularly where regulators evaluate whether reporting creates misleading impressions of delinquency or repayment.
Impact on consumers
Temporary relief is often granted to prevent default and stabilize repayment. Reporting that misclassifies relief periods can cause:
- Disputes and reinvestigation volume
- Inaccurate delinquency progression
- Unfair underwriting outcomes if relief months are misreported as missed payments (or vice versa)
Conclusion
This provides a structured framework: select the relief reporting method that matches the agreement (payment holiday vs. deferred vs. forbearance), report Scheduled Monthly Payment Amount and Account Status consistently during the relief period, and protect the integrity of Payment History Profile by avoiding retroactive edits after the plan concludes.