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Fannie Mae Increases HAMP Incentives for Early Borrower Assistance

""Fannie Mae"":http://www.fanniemae.com is bolstering the incentive fees paid to servicers modifying the GSE's loans through the Home Affordable Modification Program (HAMP). The new incentives apply to all HAMP mods with a trial period effective date of October 1, 2011 or later.

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In a ""servicing policy update"":https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2011/svc1115.pdf issued just before the Labor Day holiday, Fannie Mae explained that it will begin paying servicers based on a tiered incentive structure that coincides with the number of days the mortgage loan has been delinquent when the trial plan starts.

The GSE says the new fee structure ""encourages the servicer to identify and provide an appropriate solution to a borrower who is experiencing a financial hardship at the very early stages of the delinquency.""

For HAMP trials that are initiated at the 120-day delinquency mark or before, the incentive amount goes up to $1,600. It's $1,200 for loans that are 121-210 days delinquent at the start of the trial, and $400 for loans that are more than 210 days past due.

Fannie Mae will no longer pay the additional $500 incentive fee on mortgage loans that are either current or less than 60 days delinquent, but facing imminent default.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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