Updated Framework to Include Servicer Incentives and Penalties
Washington, DC – Federal Housing Finance Agency Acting Director Edward J. DeMarco has directed Fannie Mae and Freddie Mac (the Enterprises) to align their guidelines for servicing delinquent mortgages they own or guarantee. In a nutshell the changes will:
· establish uniform servicing requirements
· provide monetary incentives for servicers
· require servicers to contact borrowers as soon as they become delinquent
· place servicer’s focus solely on remediating the delinquency
· prevent foreclosure process from commencing if borrower and servicer are engaged in a good-faith effort to resolve the delinquency
· require servicer to ensure a borrower has been considered for foreclosure alternatives before the loan is referred for foreclosure
· offer financial incentives to encourage servicers to continue to help borrowers pursue a foreclosure alternative.
Fannie Mae and Freddie Mac will each issue detailed guidelines to their servicers in the second and third quarters of 2011. “Once fully implemented by the servicing industry, the Enterprises’ aligned policies should give homeowners a greater understanding of the process and faster resolution by requiring earlier contact, more frequent communication, and prompt decisions,” said DeMarco.
Craig Roberts, President of Pennsylvania First Settlement Services LP, is a Certified Land Title Professional (CLTP), past-President of the Pennsylvania Land Title Association, and is a licensed title agent and real estate broker in the Commonwealth of Pennsylvania.
Pennsylvania First Settlement Services is a full-service title insurance agency serving the greater Pocono area of northeastern Pennsylvania. Its services include title searches, title insurance, real estate settlements, foreclosure research, documents services and short sale assistance. www.pafirstsettlement.com
