Fannie Mae servicers to pay for Chicago ordinance under protest
Mortgage servicers for Fannie Mae will soon make payments for Chicago’s vacant property ordinance under protest.
The change, which takes effect May 1, requires Fannie servicers to include a written form of protest with the $500 fee for registration. The government-sponsored enterprise issued the directive in a letter to servicers Wednesday, first reported by the Chicago Tribune.
Freddie Mac earlier told its servicers to do the same in a February directive.
The Chicago ordinance, enacted in November, requires vacant-property owners to register with the city and makes them liable for upkeep. The Federal Housing Finance Agency sued the city a month later, saying Chicago should exclude Fannie and Freddie to protect taxpayers from what the agency says are unnecessary losses.
Fannie’s servicers must report ordinance-related expenses within 10 business days for reimbursement, unlike Freddie, which requires servicers to be preapproved for those costs.
Fannie also said it will not compensate servicers for any expenses or penalties for failing to comply with the vacant-property ordinance.