Fannie releases new rules for calculating servicing fees on modified loans
Fannie Mae is asking servicers to review the GSE's updated servicing guidelines to ensure they are following a new formula for calculating servicing fees on mortgage loan modifications. The government-sponsored enterprise stipulated in its revised servicing guide that all modified loans closed in Fannie's HomeSave Solutions Network on or after June 18 will be subject to a new servicing fee structure in which the cost will either be the fee the servicer received before the loan modification or 0.25%. Fannie said the GSE currently "requires that the servicing fee can only be changed after a mortgage loan was modified if the loan was modified to reflect a different amortization type (for example, adjustable- to fixed-rate), or if an MBS mortgage loan was appropriately removed from a pool in order to modify its terms." Fannie "makes a distinction in servicing fees between MBS loans and portfolio mortgage loans post-modification," Fannie explained. However, Fannie said it's updating the guide to "reflect a simplification of the existing servicing fee structure for mortgage loan modifications while making the servicing fee comparable to that of other secondary market investors." Fannie reminded servicers that a mortgage loan registered with Mortgage Electronic Registration Systems, or MERS, must not name MERS as the loss payee on property insurance policies. On Monday, Fannie also advised servicers to study revised rules on the GSE's foreclosure time frame and imposition of compensatory fees, as well as rules on delinquency management and default prevention. Write to Kerri Panchuk.