Fannie Mae has advised servicers that it will retire the HomeSaver Advance program (HSA) at the end of September. HSA, introduced in 2008, is a foreclosure prevention alternative that uses an unsecured promissory note to cure the delinquency on a first-lien mortgage when a short-term repayment plan of the past due amount is not feasible.
As loan workouts have increased, Fannie Mae has been purchasing fewer HSA loans, prompting the government-sponsored enterprise to extinguish the program.
The announcement (SVC-2010-10), dated Aug. 2., also added new parameters to servicers' outsourcing options. Starting Sept. 1, servicers will be prohibited from directly or indirectly requiring or encouraging their attorneys or trustees to use specified vendors in connection with Fannie Mae referrals, the announcement says. Such vendors include, but are not limited to, title companies, posting and publication vendors, and process servers, Fannie Mae says.
In announcing the change, Fannie Mae reminded servicers that their business arrangements ‘must not be tainted with an actual or perceived conflict of interest.’ Also with respect to concerns over potential conflicts of interest, Fannie Mae reminded servicers that they are prohibted from charging any outsourcing or referral fee to any trustee or attorney in connection with Fannie Mae loans.
Effective immediately, Fannie Mae must approve, in writing, the transfer of any files from one law firm or trustee to another. Unauthorized file transfers could lead to Fannie Mae's denying fee reimbursement and/or assessing fees for delays caused by such transfers.
New aging requirements for documentation will also soon govern Fannie Mae loss mitigation practices. Beginning with loss mitigation options entered into on or after Sept. 1, servicers will have to base their decisioning on financial documentation that is not more than 90 days old.
Additionally, the Fannie Mae announcement clarified the company's previous guidance regarding foreclosure actions in the name of Mortgage Electronic Registration System (MERS).
SOURCE: Fannie Mae