Fannie Mae and Freddie Mac have received a new set of directives from the Federal Housing Finance Agency (FHFA) concerning their foreclosure process. The FHFA directives are designed to help the government-controlled GSEs manage their foreclosure processes in a timelier, less “painful” fashion. FHFA hopes to establish a “clear and consistent time frame to complete the foreclosure process” as well as standardized requirements for determining fees.
Once the rules go into effect, GSE loan servicers must not exceed the number of days in the time frame for foreclosures. The time frame can be determined by factoring in a number of features about the individual foreclosure. Unless documentation of a legitimate reason for delay of the foreclosure, such as bankruptcy, probate, military indulgence or certain legal actions, is provided to the FHFA before the time line for foreclosures has expired, the mortgage servicer in charge of foreclosures will face compensatory fees and fines.
The FHFA hopes to standardize and speed the foreclosure process through these new rules and regulations while making the experience less painful for homeowners at the same time.