Fannie Mae directed its mortgage servicers to delay scheduled foreclosure sales 45 days for borrowers that have been approved for assistance through the Hardest Hit Fund. In June, the Obama administration approved $1.5 billion in foreclosure-prevention funding through programs set up by 19 state housing finance agencies (including the District of Columbia). In August, he signed off on another $600 million. The initiatives range from providing options for struggling, unemployed borrowers, as well as programs to address first and second liens, facilitate short sales and deeds-in-lieu of foreclosure, and assist in past-due payments. The states hardest hit by the foreclosure crisis are Alabama, Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, Nevada, New Jersey, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, Tennessee and Washington, D.C. Fannie released guidance Wednesday detailing how its servicers should handle those loans that qualify for the state assistance, and notified them that they should be ready to receive funds from the HFAs within 60 days after a program is launched. Borrowers can receive unemployment assistance through one of the HFAs to help make their mortgage payments. Servicers are required to accept funds through a reinstatement program, if an HFA has one, which provides aid to borrowers for bringing the mortgage current or reduce the period of delinquency. Fannie also addressed how the Hardest Hit Fund would affect loans permanently modified under the Home Affordable Modification Program. “If a mortgage loan has been permanently modified under HAMP, a borrower who subsequently becomes unemployed may use an HHF Unemployment Program to make monthly mortgage payments,” Fannie said in its guidance. If the borrower remains unemployed after leaving the program, servicers must determine if the borrower can qualify for another one of Fannie’s foreclosure prevention alternatives such as forbearance. If the borrower was not in a permanent HAMP modification and found a job, the servicers were directed to consider the borrower for HAMP. But if a borrower redefaults out of a HAMP mod while unemployed, Fannie told its servicers to only evaluate them for Fannie’s own program if the borrower finds a job. Write to Jon Prior. Follow him on Twitter: @JonAPrior
Most Popular Articles
The housing market is signaling there will be an economic recession by the 2020 election, according to Benn Steil, director of international economics at the Council on Foreign Relations.
Foreclosure activity sank in the third quarter of 2019, dropping to the lowest level in nearly 15 years, according to the latest report from ATTOM Data Solutions. Foreclosure activity in the third quarter fell 19% from a year ago to the lowest level since the second quarter of 2005, a 13-year low.