The Federal National Mortgage Association has addressed situations where mortgage insurance companies are providing servicers with foreclosure bidding instructions that differ from its own.
Several mortgage insurance firms have recently updated their servicer guidance about foreclosure bidding on Fannie Mae home loans.
In a typical transaction, the mortgage insurers instruct loan servicers to bid according to the secondary lender’s guidelines.
However, sometimes M.I. firms instruct servicers to bid an amount that differs from the instructions in Fannie’s servicing guide.
So the Washington, D.C.-based company issued a Servicing Notice Wednesday addressing the discrepancy.
According to Fannie, servicers are permitted to follow bidding instruction that differ from those in its servicing guide as long as the bid is more than it would take to make Fannie whole.
“Refer to the guidance from individual mortgage insurance companies for specific instructions on Fannie Mae mortgage loans,” the notice stated.
Fannie’s latest bidding instructions can be found in the April 17 servicing notice entitled “Bidding Instructions.”
