Monday, July 18, 2011

Fannie Mae launches exclusive foreclosure deterrence plan

Fannie Mae declares unique foreclosure avoidance planfrom Government Refinancing Assistance In addition to the HAMP and HARP and HAFA foreclosure avoidance programs offered from the federal government, Fannie Mae released its own plan just lately for the numerous loans they back. We obtain this from a recent HousingWire article about the topic: Fannie Mae introduced its version of the Making Residence Affordable Foreclosure Alternatives (HAFA) program Tuesday, implementing the plan for all conventional home loans that are held in Fannie’s portfolio, which are part of an mortgage-backed security (MBS) pool with a distinctive servicing choice, or that are part of a shared-risk MBS pool for which Fannie Mae markets the acquired house.

The Fannie Mae plan takes effect August 1, this year and is created to mitigate the impact of foreclosures on borrowers that are entitled for any mortgage modification below the Residence Affordable Modification Program (HAMP) but were unsuccessful in acquiring one, Fannie said. Like the Treasury Department’s HAFA program, servicers can't think about a borrower for HAFA before borrower is examined and eliminated from eligibility for any Making Home Affordable Modification Program (HAMP) workout strategy. Also like the Treasury plan, Fannie Mae may offer 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 entitled for $3,000 in incentives. That’s much more than within the Treasury’s HAFA program, where servicers are entitled for $1,000 and the borrower gets $1,500. Within the Treasury HAFA, the investor is also entitled for any $1,000 incentive. …

After announcing the plan in October 2009, Treasury’s HAFA plan began in April. The Fannie Mae HAFA plan is the latest in a string of programs designed to help borrowers avoid foreclosure. In addition to HAFA and HAMP workouts, Fannie Mae is letting some distressed borrowers stay in their homes as renters, under 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 twelve months. The renter must have enough income to sustain a 31% income-to-rent ratio and rental payments are not subsidized by Fannie Mae, but could possibly consist of renters suitable for Section eight payments. Also, in 03 this year, Fannie Mae instructed its servicers to think about an “alternative modifications” for all mortgages that did not qualify for any permanent conversion below HAMP. That “Alt Mod” plan, which sunsets on August 31, this year, is comparable to HAFA.
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