Posted on Thursday, May 5, 2011
Fannie Mae has released new details on its book of business, which shows the share of mortgages it owns or guarantees that’s past due by three months or longer has been on a steady decline for a year now.
The nation’s largest mortgage company reported that its seriously delinquent rate on single-family mortgage loans slipped to 4.44 percent in February of this year. That’s down just 1 basis point from 4.45 percent in January, but it marks the 12th straight month that the rate has decreased.
In February 2010, the Washington, D.C.-based GSE’s seriously delinquent rate stood at 5.59 percent, and it’s dropped every month since.
On Thursday, both Fannie Mae and its government-backed counterpart Freddie Mac announced that under the directive of their regulator, the two companies are aligning their procedures for handling past-due mortgages.
With the new guidelines, the GSEs’ goal is to create a consistent and transparent process that enables homeowners to make better informed decisions to avoid foreclosure.
The new rules direct servicers to reach out to delinquent homeowners earlier, provide a single point-of contact for borrowers throughout the loss mitigation process, align
mortgage modification terms between the two companies, put all borrowers into a trial period prior to a permanent modification, and adhere to specific foreclosure processing timelines.
Under the new guidelines, servicers must conduct a formal review of each case to ensure a borrower has been considered for foreclosure alternatives before the loan is referred for foreclosure. In addition, the servicer will not be allowed to move ahead with a foreclosure action while engaged in loss mitigation efforts to resolve the delinquency.
Monetary incentives will be awarded to servicers that perform well and fines will be imposed on those that do not. Fannie Mae anticipates providing its servicers with full guidelines on the updated requirements during the second quarter. Dates for putting the new rules into effect have not yet been issued.
“Fannie Mae has long advocated for servicing standards that include clear and consistent options,” said Michael J. Williams, president and CEO of Fannie Mae. “We have taken unprecedented steps to educate families about their options through our Fannie Mae Mortgage Help Centers, KnowYourOptions.com, and other mortgage relief efforts.”
Williams continued, “The servicing alignment initiative complements these efforts, which is good for families and good for American taxpayers. Fannie Mae fully supports this Initiative, and we remain committed to stabilizing communities and building a stronger foundation for housing.”
Fannie Mae recently released its 2010 Mission Report, detailing the company’s efforts to provide liquidity and stability to the nation’s mortgage finance market.
The GSE reports that last year, it provided funding for 599,000 borrowers to buy homes, refinanced the mortgages of 2.1 million homeowners to put them into more sustainable loans, and helped more than 500,000 homeowners avoid foreclosure.
By: Carrie Bay DS NEWS