Fannie Mae Delays Modification Policy Updates, Substitutes ARM Loan Indices

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On March 12, Fannie Mae issued a notice postponing the April 1, 2014 implementation deadline for changes to its standard and streamlined modification programs announced in SVC-2013-28. Those changes expanded the programs to include loans with a pre-modification mark-to-market loan-to-value (MTMLTV) ratio of less than 80%. In the “near future,” Fannie Mae will announce a new effective date and updated requirements for such loans. Until the new requirements become effective, loans with MTMLTVs of less than 80% will continue to be eligible for a standard or streamlined modification if the loan servicer has fully implemented the previously-announced changes. In a separate notice relating to its adjustable-rate mortgage (ARM) plans, Fannie Mae announced that it is requiring sellers and servicers to substitute certain LIBOR indices for the discontinued Federal Reserve Board CD index, and as a result it is retiring two standard ARM plans based on the discontinued index.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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