FHFA Enacts New Rules for Sales of Non-Performing GSE Loans
When Freddie Mac and Fannie Mae started selling off it’s non-performing GSEs in March 2015 it did it primarily through two sales. Sales of NPLs by the two Enterprises generally include loans that are seriously delinquent, which are those that are 90 days or more past due. In many cases, the seriously delinquent loans in the GSE portfolios are more than a year overdue.
These loans included ones that were in bankruptcy, have resulted in double reporting on credit reports, multiple claims from the new lender / servicer of different balance amounts due and other headaches. It looks more like five nights at Freddie’s then a help to consumers.
The enhanced requirements are as follows:
requiring bidders to identify servicing partners at the time of qualification, and also requiring bidders to complete a questionnaire to demonstrate a record of successful loan resolution through foreclosure alternatives; requiring the new servicer to evaluate all pre-2009 borrowers (other than those with a vacant property or an imminent foreclosure sale date) for the government’s Home Affordable Modification Program (HAMP), and evaluating all post-2009 borrowers for proprietary modifications; requiring servicers to apply a “waterfall of resolution tactics” before resorting to foreclosure, a waterfall that includes evaluating borrowers for HAMP eligibility or proprietary modification eligibility, short sale, or deed-in-lieu of foreclosure; encouraging servicers to sell foreclosed or REO properties to either a non-profit or someone who will occupy the property as a primary residence; requiring subsequent servicers to assume duties of the initial servicer; providing for better bidding transparency by developing a process for announcing upcoming NPL sale offerings that includes a proactive outreach to all potential bidders; and requiring buyers and servicers to report loan resolution results and borrower outcomes to Fannie Mae and Freddie Mac for four years after the NPL sale.
For More Info:
http://www.fhfa.gov/Media/PublicAffairs/Pages/Non-Performing-Loan-%28NPL%29-Sale-Requirements.aspx
Carol A. Lawson, Esq., 28870 U.S. Hwy 19 #300, Hodusa Towers, Clearwater, FL 33761
Phone: (727) 410-2705; email: [email protected]
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