Fannie Mae announces exclusive foreclosure avoidance plan

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Fannie Mae declares exclusive foreclosure avoidance planfrom Government Re-finance AssistanceAdditionally to the HAMP and HARP and HAFA foreclosure deterrence programs offered by the federal federal government, Fannie Mae released its own program recently to the millions of financial loans they back. We obtain this from the recent HousingWire article about the topic: Fannie Mae released its version of the Making Home Affordable Foreclosure Alternatives (HAFA) plan Tuesday, implementing the program for all conventional home loans that are held in Fannie’s portfolio, which are component of an mortgage-backed security (MBS) pool with a unique servicing option, or that are component of a shared-risk MBS pool for which Fannie Mae markets the acquired home.

The Fannie Mae program takes effect August 1, this year and is created to mitigate the impact of foreclosures on borrowers who're eligible for any mortgage modification under the House Affordable Modification Program (HAMP) but were defeated in obtaining one, Fannie said. Such as the Treasury Department’s HAFA plan, servicers can't consider a borrower for HAFA until the borrower is examined and removed from eligibility for any Creating House Affordable Modification Plan (HAMP) workout strategy. Also like the Treasury plan, Fannie Mae will probably provide servicers cash incentives for completed HAFA transactions, $2,200 for short sales and $1,200 for deed-in-lieu of foreclosure agreements. Borrowers are also eligible for $3,000 in incentives. That’s more than within the Treasury’s HAFA plan, where servicers are qualified for $1,000 and the borrower gets $1,500. Within the Treasury HAFA, the investor is also suitable for a $1,000 incentive. …

After announcing the plan in October last year, Treasury’s HAFA plan began in April. The Fannie Mae HAFA program is the latest in a string of programs created to help borrowers avoid foreclosure. Additionally to HAFA and HAMP workouts, Fannie Mae is letting some distressed borrowers stay in their houses as renters, below the deed for lease (D4L) plan. Below D4L, the homeowner-turned-renter is required to pay fair market rent to stay in their home for up to 12 months. The renter must have enough earnings to sustain a 31% income-to-rent ratio and rental payments aren't subsidized by Fannie Mae, but might consist of renters suitable for Section eight payments. Also, in March this year, Fannie Mae instructed its servicers to consider an “alternative modifications” for all mortgage loans that did not qualify for any permanent conversion under HAMP. That “Alt Mod” program, which sunsets on August 31, 2010, is comparable to HAFA.