Fannie Mae Issues Numerous Servicing Guide Announcements

Posted on December 21st, 2013 in Federal Issues, Mortgages By BuckleySandler

Over the past week, Fannie Mae has announced numerous servicing policy changes through a series of Servicing Guide Announcements. In SVC-2013-25, Fannie Mae updated allowable bankruptcy attorney and foreclosure attorney fees, as well as requirements for reimbursement of postage costs in connection with bankruptcies and foreclosures. SVC-2013-26 announced that servicers are no longer required to refer deed-in-lieu of foreclosure offers for Home Equity Conversion Mortgages (HECMs) to Fannie Mae for approval. Through SVC-2013-27, Fannie Mae updated its requirements for lender-placed insurance, including by (i) requiring that lender-placed insurance premiums charged to the borrower or reimbursed by Fannie Mae must exclude any lender-placed insurance commissions or payments earned by the servicer, broker, or any affiliated entity; (ii) requiring that a servicer’s carrier for a lender-placed insurance policy for a Fannie Mae mortgage loan must not be an affiliated entity of the servicer, which includes any captive insurance or reinsurance arrangements with an affiliated entity; and (iii) adding a new lender-placed insurance compliance certification. In SVC-2013-28, Fannie Mae expanded its standard and streamlined modification programs to include loans with a pre-modified mark-to-market loan-to-value ratio less than 80 percent. The announcement details steps servicers must take in order to determine the terms of a modified mortgage loan and ensure satisfaction of eligibility requirements. The announcement also establishes evaluation notice, solicitation letter, and trial period plan requirements for certain modifications. Finally, Fannie Mae issued SVC-2013-29 to announce that (i) all mortgage loans a master servicer transfers from one subservicer to another, from the master servicer to a subservicer, or from the subservicer to the master servicer, must obtain Fannie Mae’s prior written consent; and (ii) as part of the transfer of servicing review, Fannie Mae will evaluate the performance and capacity of any subservicer the transferee servicer elects to utilize.