Fannie Mae extends mortgage modification to give servicers more time
Fannie Mae extended the reporting time frame for servicers to submit alternative modifications for borrowers who had fallen out of Home Affordable Modification Program trials. In March, Fannie required servicers to consider an alternative modification for all mortgages that had been moved into a three-month HAMP trial but were not converted into permanent status because of eligibility restrictions. When the "Alt-Mod" program was first announced, servicers considered loans that started the trial or were offered one before May 17, 2010 and had a first payment scheduled before June 1. In the announcement Thursday, Fannie extended the timeline for servicers to submit their alt-mod cases into its network from Sept. 30 to November 30, giving these companies an extra two months to get as many cases into the system as possible. Giving more time to servicers is a deviation from its announcement earlier in the month that servicers would be charged for excessive delays in loss mitigation. But according to this guidance, Fannie is extending the time limit to get more modification paperwork in. "This extension is being provided so that servicers will have sufficient time to complete the processing of modifications for borrowers who meet the eligibility requirements for the Alt Mod program," according to the lender letter from Fannie. The top-eight servicers participating in HAMP have canceled 487,522 trial modifications, according to Treasury Department statistics. Of those, 44.5% have been given alternative modifications through proprietary programs. Mortgage servicers completed 88,551 permanent modifications on Fannie Mae and Freddie Mac loans through HAMP in the second quarter, a 65% increase from the previous quarter, according to a report from the Federal Housing Finance Agency. Write to Jon Prior.