Fannie Mae Issues Numerous Servicing Policy Updates

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On January 24, Fannie Mae issued Servicing Guide Announcements SVC-2014-01 and SVC-2014-02, and on January 29 issued SVC-2014-03. Effective April 1, 2014, the first announcement revises Fannie Mae’s requirements for borrower notification of the interest rate adjustment for a mortgage loan that has been modified and is subject to step interest rate adjustments, including Fannie Mae HAMP modifications. SVC-2014-02 updates Fannie Mae policies regarding (i) refunding overcharges for special adjustable-rate mortgage loans; (ii) bankruptcy schedules of assets and liabilities; (iii) foreclosure prevention opportunities; and (iv) third-party sales proceeds. For example, effective May 1, 2014, when an adjustable-rate mortgage loan error is identified, servicers are no longer required to contact Fannie Mae to determine if foreclosure proceedings should be discontinued or stayed, regardless of the stage of delinquency, including cases where the loan has been referred for foreclosure and the application of any payment as a result of corrections reduces the delinquency. The servicer must establish its own procedures to ensure compliance with Fannie Mae’s requirements regarding the correction of adjustment errors for all mortgage loans serviced for Fannie Mae. Through SVC-2014-03, Fannie Mae increased the repayment plan incentive fee to $500 for each new and existing repayment plan that meets Fannie Mae’s criteria and that successfully brings a mortgage loan current. The increased repayment plan incentive amount will be effective for each repayment plan that meets Fannie Mae’s criteria and successfully brings the mortgage loan current on or after March 1, 2014. Fannie Mae is also adjusting servicer incentives on short sales and Mortgage Releases.