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Fannie Mae releases delinquent mortgage rules
WASHINGTON (6/9/11)—Mortgage servicers will need to build “a strong customer-service relationship with homeowners” to determine why a borrower’s mortgage is delinquent, under new mortgage servicing guidelines issued by Fannie Mae. Those guidelines also ask lenders to assess a delinquent borrower’s ability to pay the remainder of their mortgage. The guidelines go into effect on Sept. 1. The new guidelines were released earlier this week, and the government sponsored mortgage entity said that these guidelines will “require servicers to implement consistent processes across a number of areas, and hold them accountable if they do not.” Servicers will also need to inform borrowers on any available foreclosure prevention resources, and mortgageholders must be contacted within the first 120 days that they are delinquent, Fannie Mae said. The foreclosure process will begin after 120 days of delinquency. Servicers must follow a strict timeline as they move loans through the foreclosure process, and financial penalties will be assessed for any timeline violations. However, Fannie Mae said it would provide financial incentives to mortgage servicers that work out foreclosure alternatives with their mortgageholders. The new standards are required by a Federal Housing Finance Agency (FHFA)-ordered regulatory alignment between Fannie Mae and Freddie Mac. FHFA Acting Director Edward DeMarco has said that the directive should "result in earlier servicer engagement to identify the best solution available for homeowners, given their individual circumstances." The Credit Union National Association continues to analyze the Fannie Mae release. Freddie Mac is required to release similar guidelines by the end of the third quarter of 2011. For more on the new standards, use the resource link.
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