Fannie Mae has expanded its HOPE NOW policies and enhanced the ability of servicers to handle bankruptcies and other legal proceedings.
Approved servicers will now be reimbursed up to $150 per case when they pay counseling fees on behalf of borrowers to support delinquency resolution through the HOPE NOW Alliance, according to a lender letter Friday. The maximum reimbursement was raised from $100.
The date that the counseling was initiated has been extended to Dec. 31, 2008, from May 31, 2008, the Washington, D.C.-based company said. The date that the reimbursement must be invoiced has been extended to March 31, 2009, from July 31, 2008.
Another letter from the government sponsored enterprise indicated that its servicing guide, which currently allows servicers acting in their own names to represent Fannie's interests in foreclosure proceedings, now allows servicers to represent Fannie's interest in bankruptcy, probate and other legal proceedings. The changes apply immediately.
"In order to ensure that a servicer is able to perform the services and duties incident to the servicing of the mortgage loan, Fannie Mae temporarily gives the servicer possession of the mortgage note whenever the servicer, acting in its own name, represents Fannie Mae's interests in foreclosure actions, bankruptcy cases, probate proceedings, or other legal proceedings," the revised servicer guide states. "This temporary transfer of possession occurs automatically and immediately upon the commencement of the servicer's representation, in its name, of our interests in the foreclosure, bankruptcy, probate or other legal proceeding."
Fannie also advised servicers that they may initiate when the note is at least three months delinquent, though they don't need to wait if a delinquent borrower has abandoned the property and indicated no interest in making payments. Servicers also can foreclose immediately if the property is non-owner occupied and the borrower is collecting rent but not making the mortgage payment.
Second mortgages need only be two months delinquent, though a delinquent first mortgage might cause the second to be immediately in default and enable to begin foreclosure proceedings immediately.
Servicers may comply, however, with provisions of the Servicemembers Civil Relief Act if applicable.