FNMA SVC-2013-14 Hardest-Hit Fund Modification Assistance

Investor Update: On July 1, Fannie Mae released Servicing Guide Announcement SVC-2013-14, subtitled Hardest-Hit Fund® Modification Assistance Programs.

Servicing Guide Announcement SVC-2013-14
Hardest-Hit Fund® Modification Assistance Programs

Lender Letter LL-2012-08, Hardest-Hit Fund Consolidated Guidance, provided guidance to servicers in connection with loan modification assistance programs. This Announcement notifies servicers that they must accept modification assistance received from a Housing Finance Agency (HFA) for a mortgage loan in connection with any Fannie Mae modification, without regard to whether principal forbearance is required. In doing so, servicers must also comply with the conditions outlined in Announcement SVC-2011-18, Updates to Delinquency Management and Default Prevention Requirements.

If the borrower successfully completes a Trial Period Plan but the servicer does not receive the HFA funds prior to the due date of the first modified mortgage payment, the servicer must re-evaluate the borrower to determine eligibility for a modification, in accordance with the Servicing Guide. If the borrower no longer qualifies for a modification, the servicer must send the case to Fannie Mae for decision. If, however, the servicer determines that the borrower qualifies for a modification, the servicer must not require the borrower to complete a new Trial Period Plan, even if the modified monthly mortgage payment will be higher than the Trial Period Plan payment.

The Evaluation Notices (Trial Period Plan) for Fannie Mae modifications have been modified to accommodate the changes in this Announcement.

Effective Date
Servicers are encouraged to implement the new policies in this Announcement immediately; however, servicers are required to implement these policies no later than October 1, 2013.

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Servicers should contact their Servicing Consultant, Portfolio Manager, or Fannie Mae’s National Servicing Organization’s Servicer Support Center at 1-888-FANNIE5 (1-888-326-6435) with any questions regarding this Announcement.

Gwen Muse-Evans
Senior Vice President
Chief Risk Officer for Credit Portfolio Management

To view the online article, please click here.

About Safeguard 
Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders,  and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally. Website: www.safeguardproperties.com.

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