Fannie Mae To Enforce Speedier Foreclosures
Fannie Mae is cracking down on lenders and loan servicers who are taking too long to complete routine foreclosures. On August 31, 2010, the message was loud and clear in the Fannie Mae Servicing Guide that it was time to speed this process up in an effort to push the market through and past the biggest backlog of distressed properties the market has ever seen.
The new Fannie Mae Servicing Guide (which can be downloaded here) appears to be an attempt to push foreclosures through the system at a faster pace, which hopefully will get them through the market even faster. With this Announcement, Fannie Mae:
- has updated the allowable foreclosure time frames for four states;
- is monitoring all delinquent loans in Fannie Mae's portfolio or MBS pools, and will begin notifying servicers of delays in processing delinquent loans;
- may begin conducting reviews of servicer loan files, processes, or procedures;
- requires accurate and timely reporting on the delinquency status of mortgage loans;
- will exercise its remedy to assess compensatory fees as deemed necessary.
New Fannie Mae Servicing Guide Time Frames
The announcement by Fannie Mae focuses on four States; Florida, Maryland, Nevada and New York. The new time frame for Tallahassee Foreclosures (all of Florida) is now set at 185 days, which includes an additional 35 days due to the State of Florida mandating a mediation referral prior to a foreclosure suit being commenced. For Maryland (90 days), Nevada (150 days) and New York (300 days), new times have been set as well.
The additional oversight and the threat of fees or fines for delinquent filing might just move some of these loans through the system, but it only applies to uncontested foreclosures. The Fannie Mae servicing guide assures services that "the timelines presume that there are no delays outside the control of the servicer or attorney such as diligent participation in an opt-in mediation or unavoidable judicial process or administrative delays," but nevertheless, this can only be good for the market.