New Fannie Mae Servicing Guideline – Will It Help Distressed Homeowners?

Real Estate Agent with The Palm Beach Group


Early this month, the government sponsored enterprise Fannie Mae has released their new servicing guidelines as a response to the still large number of homes entering some stage of foreclosure. The problem is actually attributed to the communication gap between servicers and distressed homeowners. The new guideline will supposedly address this gap.

However, many experts and analysts are looking at the new guidelines as simply redundant. After all, it is the job of the mortgage servicers and lenders to make sure all possible options to stop foreclosure are explored for the simple reason the repossessed home will end up as a non-performing asset in their books.

Fannie Mae has also lengthened the foreclosure timeline for most states, which is, for the most part, good news. But again, lenders have yet to find a way to speed up their foreclosure process without making mistakes that could cost the homeowners their homes. And in some cases, extending the timeline is simply delaying the inevitable.

Another change included in the new guideline is the incentive offered to lenders and servicers for completing loan modifications or short sales. This is perhaps the most disturbing since these lenders are supposed to approve such transactions on the basis of merit and not because of monetary incentives. Again, it might cause problems in the future.

Short sales have always been considered to be the best option to stop foreclosure especially for homeowners with underwater mortgages, but it is actually a complicated process. This is perhaps why it is important to talk with a short sale Realtor to find out if a short sale is the best option for you to avoid foreclosure. If it is, a Realtor can help you prepare your proposal in such a way it would be hard for the lender to reject.

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