Fannie Mae will retroactively charge mortgage servicers for failing to process severely aged loans. The government-sponsored enterprise sent an alert to servicers in the first quarter of 2011, saying it would issue fees going forward. But last week, under guidance from its regulator the Federal Housing Finance Agency, Fannie alerted servicers it would levy fines for actions taken – or in this case not taken – in 2010. A Fannie Mae spokesperson said the GSE is not disclosing which servicers will receive the invoices or the amount of fees Fannie will recoup. According to Fannie Mae guidelines, the fees will be based on the outstanding principal balance of the mortgage loan, the applicable pass-through rate, the length of the delay and any additional costs. In August, Fannie updated time frames in which mortgage servicers are expected to complete the foreclosure process. In Florida, Fannie servicers have 185 days to complete a foreclosure once the case is referred to an attorney. In Maryland, servicers have 90 days. Servicers have 150 days in Nevada. In upstate New York, mortgage servicers have 300 days, nearly a full year, to complete the foreclosure process. But in downstate New York, which includes the five boroughs of New York City, where one in 10 mortgages are seriously delinquent, servicers are expected to complete the foreclosure process in 420 days. “A compensatory fee not only compensates Fannie Mae for damages but also emphasizes the importance placed on a particular aspect of the servicer’s performance,” according to Fannie Mae guidance. “In some cases, a compensatory fee will relate to the action the servicer took, or failed to take, in handling a specific mortgage loan. At other times, the compensatory fee reflects the impact of the servicer’s performance deficiencies on Fannie Mae’s cash flow.” Write to Jon Prior. Follow him on Twitter @JonAPrior.

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