Mortgage servicers who have delayed the foreclosure process for delinquent borrowers may now get fined. Fannie Mae announced it will retroactively fine mortgage servicers for failing to process severely aged loans in foreclosure, HousingWire reports.
Fannie Mae would not disclose the amount of the fees, but the fees are to 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,” HousingWire reports.
The government-sponsored enterprise updated its time frames for mortgage servicers for navigating the foreclosure process last August.
“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 guidance for Fannie Mae from its regulator, the Federal Housing Finance Agency. “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.”
Source: “Fannie Mae to Retroactively Charge Mortgage Servicers for Foreclosure Delays,” HousingWire (June 28, 2011)
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