WASHINGTON (10/26/11)--Fannie Mae has implemented the Servicing Alignment Initiative (SAI) to streamline and simplify servicing processes.
Fannie Mae is a Strategic Services provider.
SAI is a directive from the Federal Housing Finance Agency requiring servicers of Fannie Mae and Freddie Mac loans to align their loan servicing and delinquency management practices to a uniform set of performance criteria.
The goals of SAI include:
- Improved service to borrowers and greater consistency and clarity in borrower communications;
- More efficient processing of loan modifications;
- Consistency, fairness and efficiency in the foreclosure process; and
- Increased servicer accountability, reinforced by new incentives and compensatory fees.
The new standards affect mortgage loans that either become delinquent or are determined to be in imminent default on or after Oct. 1. Fannie Mae offers detailed implementation guidelines in Servicing Guide Announcement SVC-2011-08R.
SAI sets standards in four areas: borrower contact, delinquency management practices, loan modifications and foreclosure alternatives, and foreclosure timelines.
More specifically, the new standards require servicers to reach struggling borrowers earlier in delinquency--as early as the third day following a missed payment--and more frequently, with consistent written and other communications. Such contact will help the servicer understand the borrower's circumstances, Fannie Mae said.
Servicers will use consistent written communications to inform borrowers about foreclosure prevention options. Fannie Mae and Freddie Mac provide identical borrower information packages to collect information and specify what documentation the borrower may need to provide.
Servicers will evaluate borrowers simultaneously for the Home Affordable Modification Program, Home Affordable Foreclosure Alternatives and other options. Servicers will use consistent evaluation standards, trial periods and modification terms in assessing borrowers for modifications.
While working to keep people in their homes whenever possible, servicers must move borrowers more quickly to a resolution. When foreclosure is unavoidable, servicers must adhere to uniform processing timelines.
Select servicers receive incentive payments for achieving quality benchmarks and can be assessed compensatory fees for timeline violations.
While SAI means changes for servicers, the initiative will increase transparency and accountability for servicers and borrowers. SAI requirements will help borrowers understand their options and help servicers efficiently evaluate borrowers' eligibility for a loan modification or other workout alternatives.