Posted on Thursday, March 17, 2011
Fannie Mae issued a servicing guide update Tuesday, which adds 14 additional states to the GSE’s list of jurisdictions in which its servicers must use one of the legal firms approved by Fannie Mae to handle all foreclosure and bankruptcy matters, as well as post-foreclosure legal proceedings and activities.
As specified by the GSE, the firms in its retained attorney network must handle all issues relating to conventional or government mortgages held in its portfolio, or that are part of a mortgage-backed securities (MBS) pool with the special servicing option, or a shared-risk MBS pool for which Fannie Mae markets the acquired property.
The network initially included 31 jurisdictions (30 states and Puerto Rico) with the expectation that additional jurisdictions would be added over time, Fannie Mae explained in the newly issued servicing guide. The GSE has added the following 14 jurisdictions to the mandatory retained attorney network:
• District of Columbia
• New Mexico
The GSE stressed that its list of attorneys who are eligible to receive foreclosure and bankruptcy referrals relating to Fannie Mae mortgage loans is subject to change from time to time, and that servicers are responsible for periodically checking the Retained Attorney List — which can be found here — to ensure they are using the most current approved firms.
As of now, the District of Columbia and all states except for six are included in Fannie Mae’s mandatory retained attorney network.
The exceptions are: Iowa, Montana, North Dakota, South Dakota, Vermont, West Virginia, and Wyoming. For these jurisdictions, Fannie Mae says it will continue to rely upon servicers to select and retain qualified attorneys of their choice to handle the GSE’s foreclosure and bankruptcy matters.
The effective date for mandatory use of the attorneys on the Retained Attorney List in the new jurisdictions is May 1, 2011, but Fannie Mae says servicers are encouraged to use these attorneys as soon as possible.
Included in the notice, Fannie Mae also outlined special guidelines for Nevada and Puerto Rico.
The GSE has revoked guidance previously issued for Nevada with regard to obtaining evidence of title and managing Nevada foreclosures.
Beginning May 1, servicers are required to refer foreclosure and bankruptcy referrals to the Nevada attorneys identified on the Retained Attorney List. Servicers are not authorized after the effective date to refer foreclosure matters to trustee companies in Nevada.
Effective immediately, for new foreclosure and bankruptcy referrals in Puerto Rico, servicers may use either the Fannie Mae retained attorney for Puerto Rico or qualified attorneys of their choice in accordance with the GSE’s servicing guidelines.
Servicers who choose not to use the Fannie Mae retained attorney for Puerto Rico will be required to reimburse the GSE for any losses that may occur because the attorney they selected failed to meet their responsibilities.
By: Carrie Bay, DSNEWS