will increase the maximum allowable fee servicers can pay Maryland foreclosure attorneys to $1,300 from $950 for mortgage loans referred to them on or after Feb. 1.
The fee change applies to whole mortgage loans, participating pool mortgages and others bundled into mortgage-backed securities serviced in special servicing. The government-sponsored enterprise reminded servicers that nonjudicial foreclosures are preferred in Maryland and directed the companies to request prior approval before filing through litigation.
"There have been changes to the Maryland process that require additional work by attorneys, which justifies an increase in the foreclosure fee," a Fannie Mae spokesperson told HousingWire.
Maryland had the 15th highest foreclosure rate in the country through 2010. There, one in 55 homes received a filing for a total of more than 42,000 properties.
A recent decision in Maryland courts dismissed thousands of foreclosure cases initiated by GMAC Mortgage
for faulty foreclosure affidavits. The company said it would refile the documents, which could possibly lead to the extra work for all foreclosure attorneys in the state as they attempt to straighten out their procedures.
Following the Ibanez ruling
in Massachusetts, where foreclosures initiated by U.S. Bank (USB)
and Wells Fargo (WFC)
were voided because they could not adequately prove they owned the title, bank attorneys have since begun attempts to shore up their paperwork in Massachusetts.
Fannie Mae made its announcement days after the Maryland ruling.
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