The nation’s mortgage insurers have agreed to forego prior approval on short sales and deeds in lieu of foreclosure for loans owned or guaranteed by either the Federal Home Loan Mortgage Corp. or the Federal National Mortgage Association.
Delegation agreements have been reached between nine mortgage insurance companies and Freddie Mac that enable servicers to approve short sales and deeds in lieu of foreclosure without prior approval from the mortgage insurer, according to an announcement Wednesday from the McLean, Va.-based company.
Freddie issued Bulletin No. 2012-23 outlining details for servicers.
Fannie Mae also issued an announcement today indicating that all of its mortgage insurance counterparties have entered delegation agreements. The Washington, D.C.-based firm noted that it already had such agreements in place with most of the mortgage insurers.
The agreements eliminate the need for the insurers to review the foreclosure-avoidance transactions on loans guaranteed or owned by either of the secondary lenders.
The participating mortgage insurers are CMG Mortgage Insurance Co., Essent Guaranty Inc., Genworth Mortgage Insurance Corp., Mortgage Guaranty Insurance Corp., PMI Mortgage Insurance Co., Radian Guaranty Inc., Republic Mortgage Insurance Co., Triad Guaranty Insurance Corp. and United Guaranty Mortgage Insurance Co.
The agreements go into effect on Thursday.
“By reducing the potential costs, delays and uncertainty involved in the short sale and deed in lieu process, the delegation agreements should enable more distressed borrowers to avoid foreclosure,” Freddie stated.
“These delegation agreements create an even more streamlined process that will ultimately help more families avoid the costly effects of foreclosure and benefit taxpayers,” Leslie Peeler, senior vice president for Fannie’s national servicing organization, said in the news release. “We are pleased that the mortgage insurance companies have stepped up to the plate with us to help more homeowners.”
Fannie reports that it completed 46,226 short sales and 7,509 deeds-in-lieu of foreclosure during the first-half 2012.
A spokeswoman for the Mortgage Insurance Companies of America didn’t immediately respond to a request for a statement.
