Fannie Mae Updates Servicer Requirements for Reverse Mortgages

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Fannie Mae released an update to the Reverse Mortgage Loan Servicing Manual on September 18, 2018, relieving servicers of post-foreclosure sale responsibilities.

The new changes are related to the servicer requirement to pay ground rents, co-op fees and assessments, and property taxes on Fannie Mae’s REO properties.  To reduce servicers’ costs and operational risk, Fannie Mae has removed the requirement that servicers pay co-op fees and assessments or ground rents for properties in Fannie Mae’s REO inventory.  Fannie Mae is also accepting responsibility to pay property taxes for all acquired properties in its REO inventory, including acquired properties with a foreclosure or mortgage release date before July 1, 2017.  Fannie Mae will assume the responsibility for these payments effective on October 1, 2018.

Please note that Fannie Mae discontinued the purchase of reverse mortgages in 2011.

Fannie Mae’s Announcement can be found here.

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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