Fannie Changes Rules on Removing MBS Loans for HAMP
Mortgage giant Fannie Mae (FNM) updated its policies on the reclassification and removal of mortgage-backed security (MBS) loans from MBS pools for modification under the Home Affordable Modification Program (HAMP), now requiring servicers to collect all trial modification payments and required documentation. The changes, outlined in a recent bulletin, apply to all MBS loans where payment default is imminent or already in progress when the borrowers are evaluated for HAMP. Servicers now must receive all required HAMP trial period payments and all required documentation before removing loans from MBS pools. Servicers, if required, must also reevaluate borrowers for HAMP eligibility before removing loans from the MBS pools to facilitate HAMP modifications. The required documentation includes complete and correct versions of the Making Home Affordable request for modification and affidavit or comparable documentation, income verification documentation and Internal Revenue Service (IRS) forms 4506-T or 4506T-EZ. Fannie also recommended servicers obtain a signed copy of the final modification agreement from the borrower before allowing the loan to reclassify. If mortgages listed on Fannie's HomeSaver Solutions Network (HSSN) as pending for reclassification after successful trial payments do not complete other requirements, servicers must cancel reclassification. Fannie's bulletin includes a series of steps to follow when canceling a mortgage loan scheduled for reclassification. HAMP servicers are facing increasing pressure from regulators on the rate of HAMP trial mods that convert into permanent status after borrowers make successful payments during the three-month trial period. The Treasury Department is scheduled to speak with servicers Monday regarding the progress of this program. Write to Diana Golobay.