InfoBytes, July 9, 2010 - Weekly In-depth review of news & developments in the financial services industry


Topics In This Issue

• Federal Issues

• State Issues

• Courts

• Firm News

• Mortgages

• Banking

• Consumer Finance

• Litigation

• E-Financial Services

• Privacy/Data Security

• Credit Cards

Excerpt from "Federal Issues"

Fannie Mae Announces Changes to Servicing Guide. Fannie Mae recently announced several changes to its Servicing Guide in Announcement SVC-2010-06. The announcement requires (i) quality assurance program and training for default-related activities, (ii) written policies regarding inbound calls for customer service, collections, and foreclosure prevention, and (iii) the use of manned calls for outbound calls related to collections, workout solicitations, and follow-up (i.e., automated calls are insufficient for these activities). Servicers must implement these changes no later than January 1, 2011. Before that date, servicers must use "diligent efforts" to implement the changes; Fannie Mae may also direct servicers to comply with the changes at an earlier date. The announcement also notes several revisions to the Servicing Guide that became effective as of April 28, 2010, including (i) guidelines concerning the timing and types of letters and notices that must be sent to borrowers (e.g., payment reminders, foreclosure prevention solicitations, etc.), (ii) the methods and timing of the methods that servicers must use for contacting borrowers, (iii) procedures that must be followed prior to referral to foreclosure or sale of the property (e.g., alerting borrowers of payment changes resulting from adjustable-rate mortgage resets), and (iv) requirements pertaining to bankruptcy proceeding issues (e.g., promptly notifying Fannie Mae of borrower attempts to "cramdown" a Fannie Mae mortgage loan).

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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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