Fannie Mae Updates Servicing Management Default Underwriter Tool

Posted by Patrick Barnard on December 09, 2015 No Comments
Categories : Residential Mortgage

Fannie Mae recently announced a policy change that requires servicers to calculate a borrower's full mortgage obligation – including the outstanding principal balance, past due interest and other arrearages – to determine eligibility for a Fannie Mae standard modification or streamlined modification.

Previously, only the outstanding principal balance was used. The goal of the policy change is to help servicers more effectively provide foreclosure alternatives to borrowers. It is expected that the policy change will result in more borrowers being approved for loan modifications.

As such, Fannie Mae has updated its Servicing Management Default Underwriter tool in order to help servicers deal with the increased volume.

‘We are continuously looking for ways to help struggling Fannie Mae borrowers,’ says Joy Cianci, senior vice president of credit portfolio management at Fannie Mae, in a release. ‘With this technology update, our servicers will be able to help more struggling borrowers sooner, since we are implementing the policy change directly in the tool.’

Though servicers must implement the new policy by March 1, 2016, Fannie Mae updated Servicing Management Default Underwriter ahead of that date so that borrowers can benefit from the change more quickly.

Servicing Management Default Underwriter is used by many Fannie Mae servicers to determine what foreclosure prevention options are available to help a borrower facing financial difficulty. The tool provides real-time evaluation capabilities so that servicers can provide timely, responsive and effective help to borrowers.

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