Mortgage Daily Logo

Fannie Updates Servicing Guidelines

Mortgage News

Fannie Mae addressed a host of issues, including vendors used by attorneys and trustees and fees charged, in a communication to mortgage servicers. A clarification was issued on foreclosure actions in the name of Mortgage Electronic Registration Systems.

The secondary lender clarified an earlier announcement by stating that MERS must not be named as plaintiff or foreclosing party in any foreclosure action. If MERS is the mortgagee of record, an assignment will need to be executed from MERS to the servicer. Foreclosures can only begin after the recording of the assignment unless the jurisdiction doesn’t require such.

Loans that are cured won’t necessarily require reassignment back to MERS as long as the assignment from MERS to Fannie or the servicer was recorded.

Fannie outlined the MERS requirement, as well as several other issues, today in Announcement SVC-2010-10.

The date of loss mitigation eligibility cannot be more than 90 days from financial documentation supporting income, expenses, assets and liabilities. The update impacts loss mitigation options entered into on or after Sept. 1.

HomeSaver Advance is being retired on Sept. 30 as a result of low volume accompanied by other workout alternatives.

Mandatory listing periods of three months are being eliminated on deeds-in-lieu of foreclosure, and servicers can recommend a deed-in-lieu as long as all other requirements set out in Part VII, Section 606 are met.

Servicers will no longer be allowed to require attorneys or trustees to use specific vendors on Fannie referrals. Included among the covered vendors are title companies, posting and publication vendors and service of process firms. Prior approval from Fannie will be required for vendors affiliated with the servicer.

In 31 jurisdictions, Fannie mandates the use of its attorney network for foreclosure and bankruptcy referrals, though special guidelines apply in Arizona, California and Washington.

Files being transferred between law firms or trustees will require Fannie’s prior written approval.

According to the Washington, D.C.-based company, servicers and the firms they engage cannot charge an outsourcing fee, referral fee, packaging fee or other similar fees to attorneys or trustees.

“Technology charges” paid by attorneys or trustees will be limited to $25 for the life of the loan as of Sept. 1. In addition, a $10 cap is being placed on how much an attorney or trustee can pay for the submission of electronic invoices over the loan life “regardless of the number of reinstatements, foreclosure referrals, bankruptcy filings or invoices submitted.”

Servicers were reminded that they are responsible for paying taxes and insurance on loans with no escrow accounts when the borrower fails to make the payments.

Related Posts

Centex Home Equity Announces Name and Brand Change to National Mortgage, LLC

Third-Quarter 2012 Mortgage Litigation Index

Lawsuits involving excessive fees, servicing fees and loan fees beyond state maximums. Defendant Plaintiff Court Amount Overview Case Title Case Number Date Filed Date of Activity Link to Story Fannie Mae and Freddie Mac Orangeburg County, Richland County, South...

Centex Home Equity Announces Name and Brand Change to National Mortgage, LLC

Net Branch Lawsuits

Litigation involving net branch operations. Defendant Plaintiff Court Amount Overview Case Title Case Number Date Filed Date of Activity Link to Story PHH Mortgage Corp. Mathews Supreme Court of Virginia na Court held that the term "branch office" includes not only...

Centex Home Equity Announces Name and Brand Change to National Mortgage, LLC

Whistleblower Lawsuits

Litigation related to loan servicing, including escrow issues, transfer of servicing and servicing borrowers in bankruptcy and foreclosure.   Defendant Plaintiff Court Amount Overview Case Title Case Number Date Filed Date of Activity Link to Story Bank of...

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming paperwork has been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and furniture need to...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand-new mortgage loan can be a difficult task, especially for first-time homeowners.   After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first...

Newsletter

Don’t worry, we don’t spam