Recently GSE Fannie Mae rolled out new guidelines guiding the servicers on how to manage its portfolio. Stating that it wants its borrowers, if they are in an active foreclosure and if they have a sale date within 14 days, the only acceptable remedy to stop foreclosure is to fully reinstate the defaulted loan. Until further notice to fully reinstate the home the borrower has to pay all the past due payments, late charges, attorney fees and costs, inspections fees, and so on or the home goes to sale.
If a client’s finances qualify a homeowner to be placed on a repayment plan or a loan modification at least the total amount due in back due payments along with the needed supervisor approval may be enough to get accepted in order to reinstate the defaulted mortgage and putting a stop to the foreclosure sale. Homeowners will have to have at least the past due payments to request a postponement of any upcoming foreclosure sales but of course everything is reviewed on a case by case basis and all collection activity continues until the servicer actually receives payment in hand. At this time we have been advised that the homeowner should be able to go through the modification review after the up front funds have been received. Once the funds are formally received and accounted for the account can be sent to be reviewed for a additional workout options. Generally this modification can fall into the category of a rate reduction and some cases where a modification is not an option short refinancing may be possible depending on the lender.
Is your investor on your loan Fannie Mae? Have additional questions? If you have a foreclosure question and this is your investor post it below because it is likely that the same question is on someone else’s mind.