In a recent ""announcement"":https://www.fanniemae.com/content/announcement/svc1314.pdf, Fannie Mae notified servicers of new policies related to Hardest Hit Fund (HHF) modification assistance programs.[IMAGE] [COLUMN_BREAK]
HHF provides funds to certain states hit hard by the economic and housing crisis. The funds are administered by Housing Finance Agencies and are used for a variety of mortgage assistance programs.
In the ""Servicing Guide Announcement"" released July 1, the GSE stated servicers ""must accept modification assistance received from a Housing Finance Agency (HFA) for a mortgage loan in connection with any Fannie Mae modification, without regard to whether principal forbearance is required.""
Fannie Mae further clarified that if a borrower completes a trial period plan but the servicer does not receive HFA funds before the due date for the first modified payment, the borrower must be re-evaluated for a modification.
In instances where the borrower no longer qualifies, the case must be sent to Fannie Mae for a decision. In cases where the borrower is eligible for a modification, the servicer must not require the borrower to complete another trial period.
The new policies should be implemented by October 1 though Fannie Mae encourages servicers to start earlier.