Safeguard Properties

FHFA Statement of Alfred M. Pollard

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Investor Update
October 27, 2015

“Vacant and Abandoned Properties in Relation to Foreclosure Proceedings Joint Roundtable Discussion”

Chairman Wagner, Chairman Petri, Members of the Committees, thank you for the opportunity to meet with you today to discuss a significant topic to all who care about housing and about the status of our neighborhoods not only here in Pennsylvania but across the country.  I serve as General Counsel for the Federal Housing Finance Agency (FHFA).  FHFA oversees, as regulator, the eleven Federal Home Loan Banks, including the Pittsburgh Bank, and Fannie Mae and Freddie Mac. 

At the same time as being a regulator, the Agency acts as conservator for Fannie Mae and Freddie Mac.  The conservatorships involve more direct involvement in the affairs of these regulated entities   and a $187 billion investment by the government and, therefore, taxpayers.  That investment has permitted these firms to meet their mission of providing a liquid and stable housing finance system.  At the same time, the conservator is charged with preserving and conserving Enterprise assets.  The conservatorships of these congressionally-chartered entities also entail certain additional legal responsibilities and authorities for the Agency.

Due to their more direct relationship to the purchasing and securitizing of home mortgages, my comments focus on Fannie Mae and Freddie Mac.

Foreclosure Avoidance

Before addressing vacant and abandoned properties in relation to foreclosure proceedings, I must let you know that avoiding foreclosure is the first priority of the Federal Housing Finance Agency.  Keeping homeowners in their homes is the best way to maintain stability in communities, avoid losses to the regulated entities and produces a long term benefit to neighborhoods.

Loan Modifications.     The Enterprises have been part of over 5 million special loan modifications.  They serve as the agents for implementing the Treasury Department Home Affordable Modification Program (HAMP) and have their own Home Affordable Refinance Program (HARP).  Through these programs, homeowners have been able to lower their monthly costs and remain in their homes.  Earlier this year FHFA Director Watt announced that these programs, due to expire in 2015, have been extended through 2016 and many homeowners can and should take advantage of them.

Diversity and Inclusion.     In the area of sales of non-performing loans, Director Watt has stated that the Enterprises are now making efforts to get minority-, women- and disabled-owned businesses and non-profit organizations involved in their non-performing loan (NPL) sales.  These sales provide a means for the Enterprises to sell severely delinquent loans to new buyers using new servicers who will work aggressively with borrowers to help them avoid foreclosure.  Conducting the right kind of outreach to entities that will maximize borrower engagement and neighborhood-based solutions is a critical component of successfully executing these sales in ways that will help keep more borrowers in their homes and help stabilize neighborhoods.  Information on this program is on the Enterprise websites.

Affordable Rental Housing.     Another tool that assists in foreclosure avoidance and benefits neighborhoods is support for affordable rental housing.  Director Watt recently summarized a key issue—expanding access to credit and, at the same time, seeking to continue providing liquidity in the multifamily market and especially for support of affordable rental housing.  Households across the country are paying more of their income for rent, with half of all renters spending more than 30 percent of their income on housing and 26 percent of renters expending more than 50 percent.  The Enterprises offer affordable, long-term, fixed-rate loans that enable property owners to have a stable, sustainable mortgage payment and reduce the need to increase rents charged to tenants; over 70 percent of rental units financed by the Enterprises over the last few years have been affordable to low-income households.  All of this has been accomplished with strong underwriting standards and correspondingly strong performance, which they sustained throughout the economic crisis.  In other words, helping property owners and having good underwriting standards puts renters as well as homeowners in the most sustainable position.

To further this effort, Director Watt has created exclusions to the FHFA cap on Enterprise multifamily purchases.  The cap will not apply to loans for affordable properties, including those in higher-cost areas, and excludes certain loans for manufactured housing communities as well as seniors housing and small multifamily properties affordable to low-income tenants.  Further exclusions are anticipated.

Vacant and Abandoned Properties

Vacant and abandoned properties clearly remain problems for many communities, large and small.  FHFA has heard from some of the largest cities as well as from smaller municipalities of the pressures they feel.  It should be noted that not all vacant or abandoned properties are in the hands of the private sector.  You may have seen reports that cities such as Chicago and Baltimore hold double digit thousands of properties and many vacant lots.  As such, this issue confronts both governments and the private sector.

Note on NSI.     Briefly I will mention a project that is addressing some of the issues that involve vacant or abandoned properties.  Last year Director Watt announced the Neighborhood Stabilization Initiative.  This is a pilot program designed to stabilize neighborhoods that have been hardest hit by the housing downturn.  It was jointly developed by FHFA, Fannie Mae and Freddie Mac and includes strategies for helping delinquent borrowers avoid foreclosure and strategies for disposing of the inventory of real estate owned (REO) properties held by Fannie Mae and Freddie Mac.  The number of REO properties owned by Fannie Mae and Freddie Mac is declining, however, in some areas of the country REO inventory continues to increase or remain near historic highs.  Certain markets have large concentrations of distressed and low-value REO properties as well as large volumes of loans that have been delinquent for one to two years that are likely to become REO. 

Given the unique challenges presented by these markets—high vacancy rates, weak for-sale markets, steep home-price declines—Fannie Mae and Freddie Mac are partnering with the National Community Stabilization Trust, a national non-profit organization experienced in stabilization efforts for distressed communities.  Working together, they will leverage their ties to “boots on the ground” community organizations and local non-profits and work closely with local governments to make timely and informed decisions about the best treatment of individual properties.  These may include sales to nonprofits, rehabilitation of homes, loan modifications and, in some instances, demolitions.

As to vacant and abandoned residences in general, there are two elements to addressing these properties—maintaining them and moving them to sale.

Property Maintenance.     Fannie Mae and Freddie Mac have formal property maintenance programs and these are administered by their servicers normally through full time property maintenance companies.  It should be noted that lenders and mortgagees are in different legal positions before and after they assume title to a property.  The Enterprises set national standards and there are required reviews of service provider performance.  Key elements of property maintenance include training for property maintenance vendors, seeking to find homeowners, conducting inspections, securing and stabilizing a home, keeping trash removed and lawns cut and undertaking random inspections to assure that standards are being met.  Standards are available on Enterprise websites.?

Property Sale or Disposal.     In many instances, homeowners may remain in their homes as Freddie Mac and Fannie Mae focus on selling their portfolio of vacant homes to owner occupants to promote community stabilization.  Their respective First Look Programs allow an exclusive time period at initial listing of a home where owner occupants and nonprofits can submit offers without competition from investors.  If a homeowner cannot remain in a home, then it is in the interest of the homeowner to exit in an appropriate manner.  This can be through a short sale, deed in lieu, cash for keys or other transaction.  Also, it is in the interest of local governments and of neighbors to see a property returned to productive use and occupancy, particularly if the homeowner has vacated or abandoned their home.  To return these homes to productive use and occupancy as quickly as possible, I highlight the following considerations for you regarding the treatment of vacant or abandoned properties:

1. Accelerated Foreclosure of Vacant or Abandoned Properties

Several states have enacted laws that abbreviate what can be very long foreclosure timelines to permit faster movement to foreclosures if a property is vacant or abandoned.  Timelines can be as short as 45 days.  Included in these laws are safeguards or safe harbors that protect city officials or private parties from taking an action based on certain factors that may later be reversed.  It is significant, therefore, that a government official indicate that a residence has been determined to be vacant or abandoned pursuant to a published checklist.  Such a statute should assure as well that any review or final approval of the accelerated foreclosure is also timely and not put through a process—judicial or otherwise— that vitiates the benefits of an accelerated foreclosure law.

2. Streamlined Rules

Another approach is to streamline rules for dealing with vacant or abandoned properties.  Municipalities and counties can be authorized to accelerate permitting and other procedures to deal with such properties.  For example, in many instances demolition is an appropriate action for certain properties.  In such cases, local authorities should act to provide early inspections, quick approvals and determine if any other normal procedures can be abbreviated to facilitate a properly conducted demolition.  Other rules affecting vacant and abandoned properties may be considered appropriate for waivers or faster approvals as well.

3. ?Neighborhood-Based Programs

Where possible, municipalities can focus on neighborhood approaches that include helping homeowners remain in their homes while addressing vacant or abandoned properties that exist in their neighborhoods.  Putting together a plan for outreach to community organizations, to local government agencies and to all affected lenders could result in a comprehensive approach and a beneficial outcome.  Addressing as many units as possible should provide a better outcome.  This, as I noted earlier, is the direction of the Neighborhood Stabilization Initiative.

4.Uniformity

While much of what I have noted above suggests action by localities, it should be accompanied by appropriate uniformity.  A roadmap for certain actions makes it much easier for lenders and localities to proceed.  Because all 67 Pennsylvania counties regulate the foreclosure process independently, the state may wish to consider areas where uniformity could be achieved— vacant and abandoned properties would seem to fit well within that framework in line with the ideas above.

5. Vacant Property Registration

For mortgagees, the relationship to vacant properties is at times a difficult one.  The party moving for a foreclosure is not the owner of the property and does not have the rights of an owner.  So even for a vacant property, there could be problems such as trespass allegations or other liability.

In Pennsylvania the foreclosure timeline of 810 days creates significant losses for lenders who are not being paid on their mortgage, but cannot act to sell the property.  At the same time, counties have sought to require registration and property maintenance standards.  In some cases the fees charged are so high that they represent taxes, not fees and, for Fannie Mae and Freddie Mac, they do not pay such taxes.  Further, as noted, for property maintenance, Fannie Mae and Freddie Mac have national programs that benefit local communities and their property maintenance standards are national in scope.

I hope this information has been helpful and I am happy to answer any questions you may have.?

Contacts:
Corinne Russell (202) 649-3032 / Stefanie Johnson (202) 649-3030???

Source: FHFA

FHFA Releases 2015 Performance and Accountability Report

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Investor Update
November 16, 2015

Washington, DC – The Federal Housing Finance Agency (FHFA) today released its Performance and Accountability Report, which details FHFA’s activities as regulator of the Federal Home Loan Bank System and as regulator and conservator of Fannie Mae and Freddie Mac during fiscal year 2015.  For the seventh consecutive year, FHFA received an unmodified, or “clean,” audit opinion on its FY 2015 financial statements from the U.S. Government Accountability Office. 

?Link to FY 2015 Performance and Accountability Report?

Contacts:
Stefanie Johnson (202) 649-3030 / Corinne Russell (202) 649-3032

Source: FHFA

FHFA Launches New Blog, FHFA Insights

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Investor Update
November 30, 2015

I am excited to announce the debut of a new communications tool—our new blog called FHFA Insights.  The blog is located on the Agency website, www.FHFA.gov, and is designed to serve as a resource for a wide range of stakeholders, including homeowners, renters, policy makers, media and the general public.  The blog will be used to present and discuss FHFA policies and initiatives and to provide insights directly from FHFA staff on housing finance issues.

In order to be notified of a new blog post, you can sign up to receive automatic email notifications. 

  1. Go to www.FHFA.gov, scroll down to the lower right corner.
  2. Enter your email address and click on the “subscribe” option.
  3. Follow instructions provided in a confirmation email.  If you are already a subscriber, you’ll need to update your preferences to include FHFA Insights.

We plan to add new content to FHFA Insights on a regular basis and will feature a variety of authors and topics of interest to our stakeholder community.  We welcome feedback submitted via MediaInquiries@FHFA.gov.

We appreciate your subscribing to FHFA Insights, but remember that you can also get additional FHFA info if you follow us on Twitter under the handle @FHFA, or follow us on LinkedIn and YouTube.

Thank you for your interest in FHFA and remember to subscribe if you want to be notified about new FHFA Insights!

Tagged: FHFA

By: Peter Garuccio
Associate Director for Agency Communications

Source: FHFA

FHFA Foreclosure Prevention Report – August 2015

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Investor Update
November 5, 2015

?August 2015 Highlights

The Enterprises’ Foreclosure Prevention Actions:

  • The Enterprises completed 17,806 foreclosure prevention actions in August 2015, bringing the total to 3,578,227 since the start of the conservatorships in September 2008. Over half of these actions have been permanent loan modifications.
  • There were 11,382 permanent loan modifications in August, bringing the total to 1,857,562 since the start of conservatorships.
  • The share of modifications with principal forbearance increased slightly to 19 percent. Modifications with extend-term only accounted for 47 percent of modifications in August due to improved house prices and a declining HAMP eligible population.
  • There were 2,892 short sales and deeds-in-lieu completed in August, down 7 percent compared with July.

The Enterprises’ Mortgage Performance:

  • The serious delinquency rate decreased slightly from 1.57 percent at the end of July to 1.56 percent at the end of August.

The Enterprises’ Foreclosures:

  • Third-party and foreclosure sales decreased 8 percent in August to 8,530, from 9,316 in July.
  • Foreclosure starts increased 29 percent in August to 25,121, from 19,481 in July.??

Attachments: Foreclosure Prevention Report – August 2015

Source: FHFA

FHFA: Final Amendments to Stress Testing Rule

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Investor Update
November 24, 2015

SUMMARY: The Federal Housing Finance Agency (FHFA) is adopting a final rule amending its stress testing rule adopted in 2013 to implement section 165(i) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. FHFA received no comments to its proposed amendments, published for comment in an August 21, 2015 Notice of Proposed Rule. These amendments adopt the proposed amendments without change to modify: The start date of the stress test cycles from October 1 of a calendar year to January 1 of the following calendar year; the dates for FHFA to issue scenarios for the upcoming cycle; the dates for the regulated entities to report the results of their stress tests to FHFA; and the dates for the regulated entities to publicly disclose a summary of their stress test results for the severely adverse scenario. These amendments align FHFA’s rule with rules adopted by other financial institution regulators that implement the Dodd-Frank stress testing requirements.

The final rule is effective January 1, 2016.

Source: FHFA

FHFA Announces Expansion of Neighborhood Stabilization Initiative

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Investor Update
November 10, 2015

Washington, DC – The Federal Housing Finance Agency (FHFA) today announced an expansion of the Neighborhood Stabilization Initiative (NSI) to 18 additional metropolitan areas around the country. Effective December 1, local community organizations will be given the opportunity to review and purchase foreclosed properties owned by Fannie Mae or Freddie Mac in these 18 additional metropolitan areas prior to these properties being made publicly available for purchase. Sales prices will vary from market to market.

NSI was jointly developed by FHFA, Fannie Mae and Freddie Mac and involves a partnership with Fannie Mae and Freddie Mac and the National Community Stabilization Trust (NCST)?. The pilot, launched initially in Detroit, Michigan in May 2014, was extended earlier this year to Cook County, Illinois. Based on the lessons learned from the pilot, Fannie Mae and Freddie Mac will continue their work with NCST to focus on disposition of real estate owned (REO) properties in ways that place a priority on stabilizing neighborhoods.

“The number of REO properties that Fannie Mae and Freddie Mac hold continues to decline nationwide, but there are still some communities in which the number of REO properties remains elevated,” said FHFA Director Melvin L. Watt. “Our goal is to take what we learned in Detroit and Chicago and apply it to these additional communities as quickly and efficiently as possible. Giving local community buyers an exclusive opportunity to purchase these properties at a discount, taking into account expenses saved through a quicker sale, is an effective way to give control back to local communities and residents who have a vested interest in stabilizing their neighborhoods,” Watt said.

The 18 metropolitan areas designated for NSI expansion include:

  • Akron, OH;
  • Atlanta-Sandy Springs-Roswell, GA;
  • Baltimore-Columbia-Towson, MD;
  • Chicago-Naperville-Elgin, IL;
  • Cincinnati, OH-KY-IN;
  • Cleveland-Elyria, OH;
  • Columbus, OH;
  • Dayton, OH;
  • Detroit-Warren-Dearborn, MI;
  • Jacksonville, FL;
  • Miami-Fort Lauderdale-West Palm Beach, FL;
  • New York-Newark-Jersey City, NY-NJ-PA;
  • Orlando-Kissimmee-Sanford, FL;
  • Philadelphia-Camden-Wilmington, PA-NJ-DE;
  • Pittsburgh, PA;
  • St. Louis, MO;
  • Tampa-St. Petersburg-Clearwater, FL, and
  • Toledo, OH

These markets are Metropolitan Statistical Areas in which Fannie Mae and Freddie Mac each had at least 100 REO properties valued at less than $75,000. An interactive map?, available on FHFA.gov, provides more detail about each of these metropolitan areas.

For more information about becoming an NCST community buyer, please contact NCST at newbuyer@stabilizationtrust.com?.

Link to Fact Sheet?

Contacts:
Media: Corinne Russell (202) 649-3032 / Stefanie Johnson (202) 649-3030
Consumers: Consumer Communications or (202) 649-3811?

Source: FHFA

Feds Set Deadline to Claim Independent Foreclosure Review Relief Funds

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Investor Update
November 19, 2015

Unclaimed money will go to those who already received funds

The clock is now ticking for borrowers eligible for payment under the Independent Foreclosure Review Payment Agreements who have not yet cashed or deposited their check, and if they don’t act soon, their money is going to borrowers who already cashed their checks.
 
The Federal Reserve Board announced Thursday that borrowers who have not cashed their check have until Dec. 31, 2015 to request a replacement check.

Those borrowers then have until March 31, 2016 to cash their new checks.
 
If there are still any remaining funds left over after March 31, 2016, the Federal Reserve said that it will direct the paying agent, Rust Consulting, to redistribute the funds to borrowers who have already cashed their checks.
 
“The Federal Reserve intends to distribute the maximum amount of funds to borrowers affected by deficient servicing and foreclosure practices,” the Fed said in a statement.
 
According to the Fed, the Independent Foreclosure Review Payment Agreement, overseen by the Federal Reserve and the Office of the Comptroller of the Currency, provided $3.9 billion for borrowers of 13 servicers whose homes were in any stage of the foreclosure process in 2009 or 2010.
 
The affected borrowers’ mortgages were serviced by one of the following companies, their affiliates, or subsidiaries:  Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.
 
According to the Fed, as of Oct. 2015, more than $3.5 billion in relief checks had been cashed or deposited by eligible borrowers.
 
Borrowers of servicers regulated by the Federal Reserve have cashed or deposited checks with a value of $798 million as of mid-October, the Fed said.
 
According to the Fed, that amounts to approximately 91% of the total value of the payments issued to these borrowers.
 
In February of this year, the Fed sent out checks to borrowers for the third time, noting that there were approximately 800,000 foreclosed homeowners who were still missing out on $500 million in compensation.
 
Now, the Fed is giving borrowers one last chance to claim their money. If they don’t, their money will soon belong to someone else.
 
[Correction: A previous version of this article incorrectly noted that the Office of the Comptroller of the Currency was involved in the distribution of this round of checks. The article is now correct.]

Source: HousingWire

Fannie Mae Servicing Guide Announcement SVC-2015-14 Servicing Guide Updates

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Investor Update
November 25, 2015

Servicing Guide Updates

The Servicing Guide has been updated to include the following:

  • Updates to the STAR™ Program for 2016
  • Updates to the Remittance of Property (Hazard) Insurance Loss Proceeds for Short Sales
  • Updates to Pledge of Servicing Rights and Transfers of Interest in Servicing Compensation
  • Updates to Publication Placement Costs
  • Updates to Hawaii Foreclosure Fees
  • Updates to Timeline Requirements for HAMP Expanded “Pay for Performance” Incentive Notices
  • Updates to Servicing Requirements for Florida Acquired Properties
  • Updates to Early Delinquency Counseling Requirements
  • Updates to Reporting Requirements for Bankruptcy Cramdowns
  • Removal of the Borrower Notification Sample Letter Exhibit

Each of these updates is described below. The servicer must review each topic in the Servicing Guide in its entirety to gain a full understanding of the policy change(s).

Updates to the STAR Program for 2016

Servicing Guide A1-1-04, Evaluating a Servicer’s Performance has been updated to reflect 2016 STAR Program changes as follows:

  • removes reference to the bottom 25% as unacceptable performance in relation to the STARProgram, and
  • includes subservicers in the STAR Program.

Effective Date

Any servicer selected to participate in the STAR Program will be reviewed using the new STAR Programparameters beginning January 01, 2016.

Updates to the Remittance of Property (Hazard) Insurance Loss Proceeds for Short Sales

To make remittance requirements for all mortgage loan liquidations consistent, the Servicing Guide has been updated to reflect that the servicer must remit property (hazard) insurance loss proceeds for short sales at closing via CRS using remittance code 332.

As a result of this change, policies and requirements for remitting property (hazard) insurance loss proceeds in connection with a short sale, Mortgage Release™, or foreclosure sale have been consolidated in Servicing Guide B-5-01 from Servicing Guide E-4.4-01.

Updated Servicing Guide Topics

Effective Date

The servicer must implement this policy change immediately.

Updates to Pledge of Servicing Rights and Transfers of Interest in Servicing Compensation

Fannie Mae is updating policies and requirements regarding transfers of servicing income and pledge of servicing rights as follows:

  • The seller/servicer is permitted to pledge a transfer of interest in their servicing income as long as the seller/servicer obtains Fannie Mae’s prior written consent at least 30 days prior to the proposed effective date of the transaction.
  • Fannie Mae will permit the seller/servicer to enter into a pledge of servicing or a transfer of interest in servicing income provided that the purpose for the transaction is a purpose permitted by Fannie Mae. Fannie Mae has further clarified these permitted purposes.
  • Documents required for allowable transactions have been updated to include the Purchase and Sale, Security or Financing Agreement, and the Subordination of Interest Agreement.
  • Key terms of the Acknowledgment Agreement have been removed from the Servicing Guide with regard to obligations of the seller/servicer and the secured creditor to indemnify Fannie Mae. However, these indemnification provisions have not been removed from the Acknowledgment Agreement.
  • Clarify that the Acknowledgment Agreement or Subordination of Interest Agreement may limit the seller/servicer’s right to amend particular terms of the underlying transaction documentation without Fannie Mae’s prior consent.

Updated Servicing Guide Topics

Effective Date

The servicer is encouraged to implement these policy changes immediately; but must implement the changes by January 1, 2016.

Updates to Publication Placements Costs

The Servicing Guide has been updated to reflect that Fannie Mae will reimburse the servicer an allowable cost for foreclosure sale publication placement services in Alaska, Arizona, California, Nevada, Oregon, and Washington.

Updated Servicing Guide Topics

Effective Date

This policy change is effective for foreclosure referrals sent on or after December 1, 2015 in the aforementioned states.

Updates to Hawaii Foreclosure Fees

The Allowable Foreclosure Attorney Fees Exhibit has been updated to reflect a change to the maximum allowable foreclosure fee for Fannie Mae mortgage loans secured by properties located in Hawaii.

Effective Date

This policy change is effective for all matters referred to counsel for initiation of foreclosure proceedings on or after June 1, 2012 by the present or prior servicer, provided the matter is still active as of November 25, 2015. For purposes of this Announcement, the term “active” is defined as a foreclosure matter that has not yet gone to foreclosure sale or has not been concluded by some other event, such as a Mortgage Release, short sale, mortgage loan modification, payoff, or reinstatement.

Updates to Timeline Requirements for HAMP Expanded “Pay for Performance” Incentive Notices

To offer additional flexibilities in how the servicer complies with the HAMP expanded borrower “pay for performance” incentive notice requirements, the Servicing Guide has been updated to

  • authorize the servicer to
  • send notification of the potential for receipt of the Fannie Mae HAMP expanded borrower “pay for performance” incentive to a borrower in good standing at any time leading up to the 150th day before the fifth anniversary of the HAMP modification effective date; and
  • send no additional notices if the borrower returns an executed Real Estate Fraud Certification (Form 720) or U.S. Treasury Department’s “Dodd Frank Certification” after a prior notification;
  • require a follow up communication to an initial written notice of an option to re-amortize a Fannie Mae HAMP modification only if the borrower has not responded to the initial written notice; and
  • remove reference to certain dates no longer applicable with regards to the Fannie Mae HAMP expanded borrower “pay for performance” incentive notification and payment.

Updated Servicing Guide Topics

Effective Date

The servicer is authorized to implement these policy changes immediately.

Updates to Servicing Requirements for Florida Acquired Properties

Servicing Guide E-4.3-01, Managing the Property Post-Foreclosure Sale has been updated to remove the requirement that the servicer pay all future bills for HOA or co-op corporation assessments or fees for acquired properties located in the State of Florida with a foreclosure sale date on or after January 1, 2016 unless otherwise notified by Fannie Mae.

Reverse mortgage loans are not included in this change.

Effective Date

The servicer must implement this policy change for a property securing a mortgage loan liquidated through foreclosure in the State of Florida on or after January 1, 2016.

Updates to Early Delinquency Counseling Requirements

To simplify delinquent loan servicing for community lending mortgage loans, including Fannie Mae’s new HomeReady™ mortgage loan, the Servicing Guide has been updated to eliminate several unique requirements related to servicing such mortgage loans to include:

  • sending a specific welcome letter and Borrower Authorization Counseling form;
  • providing a payment reminder notification and a Borrower Solicitation Package at earlier dates than that required for other Fannie Mae mortgage loans; and
  • preparing a monthly status report of actions taken by third-party counselors.

The servicer must ensure appropriate authorizations are executed as required by applicable law and remain fully aware of and document the status or outcome of all counseling efforts a third-party agency takes for a specific case.

Updated Servicing Guide Topics

Effective Date

The servicer is encouraged to implement these policy changes immediately; but must implement them by April 1, 2016.

Changes to Reporting Requirements for Bankruptcy Cramdowns

Servicing Guide E-2.3-03, Handling Cramdowns of the Mortgage Debt has been updated to remove the requirement that the servicer contact Fannie Mae upon the completion of incremental milestones related to a cramdown within the servicer’s or law firm’s delegated authority. With this change, the servicer must only send the Bankruptcy Cramdown Template to etm_delmods@fanniemae.com once the cramdown has been confirmed.

If neither the servicer nor the law firm has been granted delegated authority to address a borrower’s request for a cramdown, the servicer must immediately report this as non-routine litigation to Fannie Mae’s Legal department by submitting a Non-Routine Litigation Form (Form 20).

Servicing Guide F-4-03, List of Contacts has been updated with the new email address for submitting the Bankruptcy Cramdown Template.

Effective Date

The servicer must implement this policy change by December 1, 2015.

Removal of the Borrower Notification Sample Letter Exhibit

The Borrower Notification Sample Letter is a letter sent by Fannie Mae and does not require any action by the servicer. Therefore, it has been retired as a Servicing Guide Exhibit from Fannie Mae’s website.

The servicer should contact its Servicing Consultant, Portfolio Manager, or Fannie Mae’s Credit Portfolio Management’s Servicer Support Center at 1-888-FANNIE5 (1-888-326-6435) with any questions regarding this Announcement.

Malloy Evans
Vice President
Credit Portfolio Management

Source: Fannie Mae

Fannie Mae: Servicing eNotes

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Investor Update
November 13, 2015

Servicing eNotes provides Servicers and Sub-Servicers many advantages to support a growing electronic lending marketplace. As lenders are focused on competitive advantage, operational efficiencies, and faster delivery to the secondary market, eMortgages are a viable solution. Servicing eNotes for your lender partners helps them achieve those goals.

Q&A
What is an eMortgage and/or eNote? A mortgage loan where the critical loan documentation, specifically the promissory note (called an eNote), is created, executed, transferred, and ultimately stored electronically.

Benefits and Features

  • Allows for quicker receipt of notes – instantly
  • Ensures accuracy of Note data and eliminates re-keying time and errors
  • More transparent and simpler identification and transfer of security interests
  • Eliminates lost original notes or unrecorded assignments
  • Reduces and/or eliminates shipping and storage costs
  • Servicing eNotes for Fannie Mae enables a seamless transition to a new servicer for MSR transfers
  • Connectivity to MERS® eRegistry provides complete access for the Servicer/Sub-Servicer to initiate changes
  • Immediate assignment of Servicer/Sub-Servicer on MERS® eRegistry during registration of the eNote
  • Assists in automating post-closing audit of eNote servicing data


Fannie Mae makes doing business easier through eNotes:

Fannie Mae supports our servicing partners who look to service eMortgages. eNotes enable efficient delivery and transfer of control while eliminating risks associated with paper notes.

  • SMARTDoc Format enables rigorous and standardized eligibility, compliance validation, and is recognized by all industry participants.
  • Unified system integration with MERS, Fannie Mae, Lender, Servicer, and Warehouse Banks.
  • Straightforward system-to-system testing and guided workflows.
  • The Guide to Delivering eMortgage Loans navigates Servicers through the process for servicing eNotes including step-by-step considerations.
  • An experienced eMortgage team is available to support your strategy and implementation of servicing eNotes.


For more Information go to FannieMae.com:
www.fanniemae.com/singlefamily/emortgage

Source: Fannie Mae

Fannie Mae: Servicer Expense Reimbursement Job Aid Updated

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Investor Update
November 12, 2015

The Servicer Expense Reimbursement Job Aid has been updated and posted to FannieMae.com. This Job Aid provides some operational instructions based on servicing policies. Specific updates to the Job Aid include:

  • Where to Submit an Expense Reimbursement Claim: This section has been updated to provide references to Appendix A – Most Frequently Used Line Items in BKFS LoanSphere™ Invoicing and Appendix B – Available Line Item Subcategories in BKFS LoanSphere Invoicing.
  • What to Submit for an Expense Reimbursement Claim: This section has been updated with clarification on acceptable supporting documentation for Hazard and Flood Insurance, and Taxes, Tax Penalties and Interest.
  • Q&As: HomeTracker® and LoanSphere Invoicing questions have been added and updated.
  • Appendices: This section has been added to include Appendix A – Most Frequently Used Line Items in BKFS LoanSphere Invoicing and Appendix B – Available Line Item Subcategories in BKFS LoanSphere Invoicing.


Servicer Expense Reimbursement Notification of Updates to LoanSphere Invoicing

Fannie Mae Expense Reimbursement will be consolidating the available expense reimbursement claim line item categories and subcategories in the Black Knight Financial Services LoanSphere Invoicing Application in Q1 2016. This update will streamline the claim line item choices in the application for improved consistency in submitting and processing expense reimbursement requests. 

A full listing of the claim line items that will be impacted is included in the Servicer Expense Reimbursement Job Aid. Additionally, a list of the most common Servicer expenses is available in the Job Aid. To ensure readiness, servicers must take necessary action to prepare their systems and processes for the line item updates. 

Reference the new documents for all expense subcategories available in BKFS LoanSphere Invoicing.

  • Appendix A – Most Frequently Used Line Items in BKFS LoanSphere Invoicing
  • Appendix B – Available Line Item Subcategoies in BKFS LoanSphere Invoicing

All new line items are currently available for use. Line item consolidation is targeted for implementation in February 2016. If you have any questions or concerns related to the LoanSphere Invoicing Line Item Consolidation project, please submit your inquiry to expensereimbursement_lineitemconsolidationproject@fanniemae.com.

Source: Fannie Mae