Fannie Mae Announces Miscellaneous Servicing Policy Changes

Fannie Mae Mortgage Servicing Servicing Guide

On August 28, Fannie Mae issued Announcement SVC-2013-17, which describes miscellaneous servicing policy changes and updates. The announcement provides that a servicer is no longer obligated to treat a servicer name change as a transfer of servicing (although all other notification requirements related to name changes remain unchanged). In addition, the announcement clarifies servicer obligations with respect to unemployment forbearance arrangements, providing that (i) prior to expiration of an initial unemployment forbearance term (or upon re-employment), the borrower must be evaluated for an extension or another workout option and (ii) prior to expiration of an extended unemployment forbearance term or upon notification of re-employment, the borrower must be evaluated for other available foreclosure alternatives. The announcement also provides that (i) a borrower in a trial period plan who receives an evaluation notice has 14 days to indicate his or her intent to accept or reject the modification offer, and (ii) in situations where a due-on-sale clause is not enforceable because the property transfer constitutes an “exempt transaction,” a servicer must implement policies and procedures allowing it to promptly identify and communicate with the new property owner (including a widow, executor or administrator of the borrower’s estate, or other authorized representative upon notice of the death of a borrower) and allow such new property owner to make mortgage payments, to pursue an assumption, and to be evaluated for foreclosure alternatives, as applicable. If a mortgage loan is delinquent and the new property owner is unable to bring the mortgage loan current, he or she must be evaluated for all available workout options, and the servicer must follow Servicing Guide eligibility and Borrower Response Package requirements in doing so. All changes and updates take effect immediately for mortgage loans that become delinquent on or after the date of the announcement, except those related to unemployment forbearance. Servicers are required to implement the unemployment forbearance policies no later than November 1, 2013.