Home / Daily Dose / Fannie Mae Updates Foreclosure & Modification Servicing Guides
Print This Post Print This Post

Fannie Mae Updates Foreclosure & Modification Servicing Guides

Fannie Mae recently release the latest Servicing Guide Announcement SCV for 2016-2017. Updates in the Servicing Guide include changes related to allowable foreclosure attorney fees for New York, suspending foreclosure proceedings for a streamlined modification offer, and servicing government mortgage loans.

The guide states that the “Allowable Foreclosure Attorney Fees Exhibit” has been updated to reflect a change to the maximum allowable judicial foreclosure fee for Fannie Mae mortgage loans secured by properties located in New York. This updated fee applies to all matters referred to counsel for initiation of foreclosure proceedings regardless of referral date, provided the matter is still active as of August 17, 2016. The guide says that the servicer is encouraged to implement the new fee for the affected files as soon as possible, but must do so no later than November 1, 2016. Additionally, it is noted that the servicer may exercise reasonable discretion in determining how to implement the fee, including working as needed with the law firm or an applicable invoicing technology provider.

The guide has also been updated to clarify that, if the servicer has made the borrower an offer for a Fannie Mae Streamlined Modification, the borrower must contact the servicer verbally or in writing within 14 days of the date of the offer to indicate his or her intent to accept the offer in order for the servicer to delay the next legal action in the foreclosure proceeding until the last day of the month in which the first payment is due. These policy changes are encouraged to be implemented immediately by the servicer, but they must implement these changes by November 1, 2016.

Furthermore, the guide cites that Servicing Guide E-4.1-01, Notifying Fannie Mae of an Acquired Property and E-4.2-02, Handling Reconveyance to the Insurer or Guarantor have been updated to no longer require the servicer to submit an REOgram if a second conveyance is not accepted by HUD or VA. The guide reminds the servicer that they must take all actions necessary to ensure that Fannie Mae recovers the full amount due under a claim with the insurer or guarantor and that failure to do so may result in Fannie Mae electing a repurchase, a make whole payment, or an indemnification payment.

It is also noted that Servicing Guide D2-3.2-06, Government Mortgage Loan Modifications has been updated to reflect that, consistent with Servicing Guide A2-1-08, Compliance with Requirements and Laws, the servicer must provide to HUD all mortgage loan modification and partial claim documents in a timely manner. The guide says that in the event HUD issues a request for repayment of the incentive payment or partial claim, the servicer must repay the funds.

Lastly, Servicing Guide F-1-29, Processing a Workout Incentive Fee has been updated to reflect that the servicer must enter a closed case into HSSN for an incentive fee to be paid to the servicer for an FHA mortgage loan modification. The guide says the servicer is encouraged to implement these policy changes immediately but must implement the changes by October 1, 2016.

About Author: Kendall Baer

Kendall Baer is a Baylor University graduate with a degree in news editorial journalism and a minor in marketing. She is fluent in both English and Italian, and studied abroad in Florence, Italy. Apart from her work as a journalist, she has also managed professional associations such as Association of Corporate Counsel, Commercial Real Estate Women, American Immigration Lawyers Association, and Project Management Institute for Association Management Consultants in Houston, Texas. Born and raised in Texas, Baer now works as the online editor for DS News.

Check Also

Federal Reserve Holds Rates Steady Moving Into the New Year

The Federal Reserve’s Federal Open Market Committee again chose that no action is better than changing rates as the economy begins to stabilize.