GSEs Issue New Servicing Guidelines for Delinquent Mortgages

DSNEWS - April 29, 2011

Fannie Mae and Freddie Mac are issuing new guidelines to servicers in order to align their procedures for handling past-due mortgages.

The updated guidelines specifically address the so-called “dual track” issue... The foreclosure process may not commence if the borrower and servicer are engaged in a “good-faith effort” to resolve the delinquency.

The servicer must conduct a formal review of each case to ensure a borrower has been considered for foreclosure alternatives before the loan is referred for foreclosure. Even after foreclosure processing begins, financial incentives are provided to encourage servicers to continue to help borrowers pursue a foreclosure alternative.

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