Fannie Mae, the nations’ largest mortgage company, is going to be cracking down on loan servicers who take too long to complete foreclosures and there could be fines involved.
In an announcement earlier this week, Fannie Mae alerted servicers that it will be monitoring delinquent loans to ensure foreclosures will be handled within specific time frames. The GSE (government-sponsored enterprise) may impose what it is calling “compensatory fees for breach of servicing obligations” (penalties) for poor performance by a servicer when not completing foreclosures in a timely manner.
Fannie Mae indcated it will be monitoring “all whole mortgages, participation pool mortgages, and MBS pool mortgages with a special servicing option referred toan attorney or trustee to initiate foreclosure proceedings on or after July 1, 2010″. Servicers will be given an opportunity to explain any unusual circumstances that may explain why the process was delayed.
Fannie Mae updated the allowable foreclosure time frames for four states: Florida, Maryland, Nevada, and New York-both upstate and downstate.
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