Fannie Mae and Freddie Mac had two separate protocols with dealing with the delinquent mortgages after a push from the FHFA, the mortgage giants must now abide by the same process. They must engage with the borrower as soon as the customer becomes delinquent on their loans.
The mortgage servicers must work with the borrower(s) on coming up with alternatives to foreclosure until the 120th day of delinquency. The servicers will perform a formal review of the case to ensure the borrower knows of any alternatives before foreclosure is filed.
The FHFA stated the new process with force the mortgage service providers to contact the troubled borrowers sooner, and help develop a modification agreement quicker.
Fannie Mae CEO Michael Williams:
This initiative will direct service providers to reach families earlier, communicate more frequently and clearly, and provide relief, Fannie Mae fully supports this Initiative, and we remain committed to stabilizing communities and building a stronger foundation for housing."
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