Fannie Mae, Freddie Mac Direct Servicers To Comply With Chicago Vacant Property Settlement

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This week, Fannie Mae (Lender Letter LL-2014-03) and Freddie Mac (Bulletin 2014-7) advised servicers of the memorandum of understanding the FHFA recently entered into to resolve litigation with the City of Chicago over a city ordinance that requires mortgagees to register vacant properties and pay a $500 registration fee per property, and provided guidance for complying with the memorandum. Fannie Mae and Freddie Mac direct servicers to comply with the MOU by May 12, 2014, including by (i) voluntarily registering vacant properties with the city; (ii) halting remittance of vacant property registration fees, penalties, or fines to the city; and (iii) no longer completing any maintenance required by the ordinance. The guidance also provides instructions for obtaining reimbursement for fees already submitted to the city. Fannie Mae and Freddie Mac will not reimburse servicers for any fees assessed for failing to comply with the ordinance that are incurred on or after May 12.

Topics:  Abandoned Property, Administrative Fines, Fannie Mae, FHFA, Freddie Mac, Memorandum of Guidance, Mortgagee, Registration

Published In: Finance & Banking Updates, Residential Real Estate Updates, Zoning, Planning & Land Use Updates

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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