Fannie and Freddie Servicer Response Timelines on
Preforeclosure Sales
When evaluating a borrower’s request for Fannie Mae’s
Home Affordable Foreclosure Alternatives (HAFA) program or
the non-HAFA program for Fannie Mae preforeclosure sales,
servicers must comply within the response times described in
Servicing Guide Announcement SVC-2012-07, Changes to
Servicer Response Times and the Preforeclosure Sale Process
and outlined in the table below. Servicers must document
the mortgage servicing loan file for validation of
compliance with these response timelines.
Fannie Mae HAFA - Servicer Evaluation of Borrower Response
Package (BRP)
- Within 3 business days of receipt of the BRP - The
servicer must acknowledge receipt of the BRP to the borrower
either verbally or in writing.
- Within 5 business days of receipt of the BRP - If the
servicer determines that documentation is missing, the
servicer must send an Incomplete Information Notice to the
borrower.
- Within 5 business days of a decision but in no event more
than 30 calendar days after receipt of a complete BRP - The
servicer must send an Evaluation Notice to the
borrower. If the servicer determines a HAFA Short Sale is
the most appropriate foreclosure alternative, the HAFA Short
Sale Agreement (Form 184) and the HAFA Request for Approval
of Short Sale without Short Sale Agreement (Form 185) should
be
included with the Evaluation Notice.
Within 30 calendar days after receipt of the complete BRP
but in no event more than 60 days after receipt of the
complete BRP - If the servicer is unable to fully evaluate
the
borrower for a HAFA, including preparation of the Form 184
and Form 185, an extension of 30 calendar days is permitted
as long as the servicer provides weekly verbal or written
status updates to the borrower. All communication must be
documented in the mortgage loan servicing file. The
servicer must send the Evaluation Notice no later than 60
days after receipt of the complete BRP.
- Within 14 calendar days after return of a fully executed
Form 184 - The servicer must allow the borrower 14 calendar
days to return a fully-executed Form 184 with required
documentation.
- Within 10 calendar day extension of return of fully
executed Form 184 - If necessary, the servicer may allow the
borrower up to 10 additional calendar days to complete the
Form 184 submission.
- Within 10 business days of receipt of the Form 185 - The
servicer must respond with a decision of approval or denial.
*If the offer results in net proceeds equal to or greater
than the minimum acceptable
net proceeds (MANP), the servicer must approve the short
sale.
*If the offer does not result in net proceeds equal to or
greater than MANP, the servicer must provide a counteroffer
with the denial.
* The MANP should not be disclosed to the borrower.
- 5 business days after communicating a counteroffer - The
servicer must request a response from the borrower on the
purchaser’s decision of a counteroffer.
- Within 10 business days after receipt of revised offer -
The servicer must respond with a decision on a revised offer
from the borrower.
*If the offer results in net proceeds equal to or greater
than the MANP, the servicer must approve the short sale.
*If the offer does not result in net proceeds equal to or
greater than the MANP, the servicer may provide a
counteroffer with the denial.
*The MANP should not be disclosed to the borrower.
Fannie Mae’s Non-HAFA Preforeclosure Sale - Prior to
Receipt of a Preforeclosure Sale Offer
- Within 3 business days of receipt of the BRP - The
servicer must acknowledge receipt of the BRP to the borrower
either verbally or in writing.
- Within 5 business days of receipt of the BRP - If the
servicer determines that documentation is missing, the
servicer must send an Incomplete Information Notice to the
borrower.
- Within 5 business days of a decision but in no event more
than 30 calendar days after receipt of a complete BRP - The
servicer must send an Evaluation Notice to the
borrower. The Evaluation Notice should include the approved
model language provided on eFannieMae.com.
Fannie Mae’s Non-HAFA Preforeclosure Sale –
Preforeclosure Sale Offer Received with a BRP
- Within 3 business days of receipt of the offer The
servicer must acknowledge receipt of a short sale offer.
- Within 5 business days of receipt of the offer If the
servicer determines that documentation is missing, the
servicer must send an Incomplete Information Notice to the
borrower.
- Within 5 business days of a decision but in no event more
than 30 calendar days after receipt of a complete BRP - The
servicer must respond to the short sale offer
with approve, approve with conditions, deny with
counteroffer, or “still under review.”
- 5 business days after communicating a counteroffer If the
response is “deny with counteroffer,” the servicer must
request a response from the borrower on the purchaser’s
decision of a counteroffer.
- Within 10 business days after receipt of revised offer
The servicer must ensure that revised offers are evaluated
within time frames that enable a decision to be communicated
to the borrower within 10 business days after receipt of the
revised offer.
- 30 calendar days after receipt of the BRP If the
servicer responds with “still under review,” an
extension of 30 calendar days is permitted as long as the
servicer provides weekly verbal or written status updates.
All communication must be documented in the
mortgage loan servicing file.
- Within 60 calendar days of receipt of the BRP and offer -
The servicer must respond with a final decision.
Economic growth flat
Gross domestic product (GDP) expanded at a 2.2 percent
annual rate, the Commerce Department said on Friday in its
advance estimate, moderating from the fourth quarter's 3
percent rate. While that was below economists' expectations
for a 2.5 percent pace, a surge in consumer spending took
some of the sting from the report. However, growth was still
stronger than analysts' predictions early in the quarter for
an expansion below 1.5 percent. Although the details were
mixed, the GDP report offered a somewhat better picture of
growth compared with the fourth quarter, when inventory
building accounted for nearly two thirds of the economy's
growth. In the first quarter, demand from consumers took up
the slack. Consumer spending which accounts for about 70
percent of U.S. economic activity, increased at a 2.9
percent rate - the fastest pace since the fourth quarter of
2010. That compared to a 2.1 percent rise in the fourth
quarter. Business spending fell at a 2.1 percent pace after
rising 5.2 percent in the fourth quarter.
Excluding inventories, GDP is rose at a 1.6 percent rate. In
the fourth quarter, the comparable figure was just 1.1
percent. Elsewhere, growth in the first quarter was held
back by a another drop in government defense spending, which
confounded expectations for a strong rebound. An increase in
exports was offset by a rise imports, causing trade to have
virtually no impact on growth. Separately, civilian
employment costs rose more modestly by 0.4 percent during
the first quarter, primarily because growth in benefits
slowed after a sharp rise in last year's fourth quarter,
Labor Department data showed on Friday. The gain in
employee costs was slightly lower than the 0.5 percent rise
forecast by analysts surveyed by Reuters. Costs had
increased 0.5 percent in the final three months of 2011.
Benefit costs, which account for 30 percent of compensation,
grew by 0.5 percent in the first quarter after a sharp 0.7
percent rise in last year's fourth quarter. Wages and
salaries - the other 70 percent of costs - were up 0.5
percent in the first three months this year, a pickup from
the 0.3 percent gain posted in last year's closing quarter.
Olick - foreclosures return
"Big jumps in foreclosure activity in cities like
Pittsburgh, Indianapolis, New York and Raleigh pushed the
national numbers higher in the first three months of this
year, according to a new report from RealtyTrac, an online
foreclosure sales and data company. A majority of U.S.
housing markets posted a quarterly increase in foreclosure
activity, although the numbers are still down from a year
ago. 'First quarter metro foreclosure trends were a mixed
bag,' said Brandon Moore, chief executive officer of
RealtyTrac, adding that the increase in the number of cities
seeing a quarterly jump is, 'an early sign that long-dormant
foreclosures are coming out of hibernation in many local
markets.' Tracking foreclosure activity is a tricky business
right now, as the system has been roiled with problems left
over from the so-called 'robo-signing' foreclosure paperwork
scandal. The five largest banks signed a $25 billion
settlement agreement earlier this year, requiring them to do
more modifications and write down principal on some troubled
loans. While some expected foreclosure numbers to surge, as
states that require a judge in the foreclosure process
finally start pushing the documents through again, but more
recent data has shown the opposite. As banks work on saving
more loans or doing foreclosure alternatives, like short
sales, deeds in lieu of foreclosure, or deeds for rent
programs, the final foreclosure numbers are falling. New
mortgage delinquencies are also falling, thanks to a slowly
improving jobs picture.
Still, inventories of properties in the foreclosure process
are still abnormally high, and some of the usual markets are
the culprits. Stockton and Modesto, California still have
the highest foreclosure rates in the nation, while Las Vegas
dropped to the eighth spot, with foreclosure activity down
61 percent from a year ago. The Phoenix market is also
improving, although still in the top ten list of foreclosure
rates. Just over 7 percent of U.S. loans were in some stage
of delinquency in March, and 4.14 percent were in the
foreclosure process, according to a new report from Lender
Processing Services. The delinquency number is down almost 9
percent from a year ago, but the foreclosure inventory is
fairly flat, down 1.6 percent from a year ago, but up
slightly from the previous month. 5.6 million properties are
still in some stage of delinquency or foreclosure. These
numbers, negative home equity, and still-tight credit are
the largest impediments to a robust recovery in the housing
market."
Treasury Secretary wants to open markets to China
Treasury Secretary Timothy Geithner said Thursday the United
States was willing to open up its markets to China and give
it more access to U.S. technologies if Beijing made progress
on issues that concern the United States. Also Thursday, a
top GOP lawmaker pressed the Obama administration to
increase pressure on China to make currency and trade
reforms. The comments came ahead of the U.S.-China
Strategic and Economic Dialogue meetings in Beijing next
week. "We are willing to continue to make progress on these
issues, but our ability to do so will depend in part on how
much progress we see from China on issues that are important
to us," Geithner said. He repeated that China's currency,
the yuan, needed to appreciate more rapidly and pledged that
the United States would continue to push aggressively for
fair treatment of U.S. companies doing business with China.
Rep. Dave Camp, chairman of the House of Representatives
Ways and Means Committee, urged the administration to
negotiate an investment treaty with China and to press the
world's second-largest economy to make reforms. "Plain and
simple, we cannot allow China to continue its unacceptable
trade practices," the Michigan Republican said in a speech,
referring to longstanding barriers to U.S. exports and the
widespread piracy and counterfeiting of U.S. goods. "The
litany of China's trade distorting policies is deeply
troubling and cannot be allowed to stand," Camp said. "In
addition, we should pursue a Bilateral Investment Treaty
(BIT) with China." Camp's call for the United States to
begin talks with China on a treaty comes one week before
Geithner and Secretary of State Hillary Clinton travel to
Beijing for high-level talks.
Remodelling Market Index (RMI) flat
Due to a recently discovered computer coding error, the
National Association of Home Builders (NAHB) has revised the
RMI going back to 2006. The error had slightly reduced the
true values of the overall index, as well as its two major
components. The revisions generally show a one point or less
quarterly increase, with quarter-to-quarter patterns
remaining relatively unchanged. Some of the subcomponents
experienced larger revisions but in a counteracting fashion,
so that the impact on the primary indicators was muted.
Remodeling activity remained relatively flat in the first
quarter of 2012, as the Remodeling Market Index (RMI)
compiled by the National Association of Home Builders
decreased one point to 47 from the upwardly revised 48 in
the previous quarter. The overall RMI combines ratings of
current remodeling activity with indicators of future
activity. An RMI below 50 indicates that more remodelers
report market activity is lower (compared to the prior
quarter) than report it is higher.
In the first quarter, the RMI component measuring current
market conditions dropped one point to 49, while the
component measuring future indicators of remodeling business
fell two points to 44. “We are seeing that the demand for
remodeling work has been pulled forward because of a mild
winter,” said NAHB Remodelers Chairman George “Geep”
Moore Jr., GMB, CAPS, GMR and owner/president of Moore-Built
Construction & Restoration Inc. in Elm Grove, La. “That is
why many remodelers reported lower numbers for future
activity.” The three components measuring current market
conditions moved in different directions in the first
quarter: major additions remained even at 44; minor
additions rose one point to 52; and maintenance and repair
dropped four points to 51. Two of the four components
measuring future market indicators decreased: backlog of
remodeling jobs dropped four points to 43 and appointments
for proposals fell five points to 45. Meanwhile, calls for
bids rose one point to 47 and amount of work committed for
the next three months remained even at 42. Regionally,
remodeling market conditions in the West increased three
points to 47, while the other three regions showed declines:
the Northeast to 48 (from 55), the Midwest to 50 (from 52)
and the South to 46 (from 49).
Preforeclosure Sales
When evaluating a borrower’s request for Fannie Mae’s
Home Affordable Foreclosure Alternatives (HAFA) program or
the non-HAFA program for Fannie Mae preforeclosure sales,
servicers must comply within the response times described in
Servicing Guide Announcement SVC-2012-07, Changes to
Servicer Response Times and the Preforeclosure Sale Process
and outlined in the table below. Servicers must document
the mortgage servicing loan file for validation of
compliance with these response timelines.
Fannie Mae HAFA - Servicer Evaluation of Borrower Response
Package (BRP)
- Within 3 business days of receipt of the BRP - The
servicer must acknowledge receipt of the BRP to the borrower
either verbally or in writing.
- Within 5 business days of receipt of the BRP - If the
servicer determines that documentation is missing, the
servicer must send an Incomplete Information Notice to the
borrower.
- Within 5 business days of a decision but in no event more
than 30 calendar days after receipt of a complete BRP - The
servicer must send an Evaluation Notice to the
borrower. If the servicer determines a HAFA Short Sale is
the most appropriate foreclosure alternative, the HAFA Short
Sale Agreement (Form 184) and the HAFA Request for Approval
of Short Sale without Short Sale Agreement (Form 185) should
be
included with the Evaluation Notice.
Within 30 calendar days after receipt of the complete BRP
but in no event more than 60 days after receipt of the
complete BRP - If the servicer is unable to fully evaluate
the
borrower for a HAFA, including preparation of the Form 184
and Form 185, an extension of 30 calendar days is permitted
as long as the servicer provides weekly verbal or written
status updates to the borrower. All communication must be
documented in the mortgage loan servicing file. The
servicer must send the Evaluation Notice no later than 60
days after receipt of the complete BRP.
- Within 14 calendar days after return of a fully executed
Form 184 - The servicer must allow the borrower 14 calendar
days to return a fully-executed Form 184 with required
documentation.
- Within 10 calendar day extension of return of fully
executed Form 184 - If necessary, the servicer may allow the
borrower up to 10 additional calendar days to complete the
Form 184 submission.
- Within 10 business days of receipt of the Form 185 - The
servicer must respond with a decision of approval or denial.
*If the offer results in net proceeds equal to or greater
than the minimum acceptable
net proceeds (MANP), the servicer must approve the short
sale.
*If the offer does not result in net proceeds equal to or
greater than MANP, the servicer must provide a counteroffer
with the denial.
* The MANP should not be disclosed to the borrower.
- 5 business days after communicating a counteroffer - The
servicer must request a response from the borrower on the
purchaser’s decision of a counteroffer.
- Within 10 business days after receipt of revised offer -
The servicer must respond with a decision on a revised offer
from the borrower.
*If the offer results in net proceeds equal to or greater
than the MANP, the servicer must approve the short sale.
*If the offer does not result in net proceeds equal to or
greater than the MANP, the servicer may provide a
counteroffer with the denial.
*The MANP should not be disclosed to the borrower.
Fannie Mae’s Non-HAFA Preforeclosure Sale - Prior to
Receipt of a Preforeclosure Sale Offer
- Within 3 business days of receipt of the BRP - The
servicer must acknowledge receipt of the BRP to the borrower
either verbally or in writing.
- Within 5 business days of receipt of the BRP - If the
servicer determines that documentation is missing, the
servicer must send an Incomplete Information Notice to the
borrower.
- Within 5 business days of a decision but in no event more
than 30 calendar days after receipt of a complete BRP - The
servicer must send an Evaluation Notice to the
borrower. The Evaluation Notice should include the approved
model language provided on eFannieMae.com.
Fannie Mae’s Non-HAFA Preforeclosure Sale –
Preforeclosure Sale Offer Received with a BRP
- Within 3 business days of receipt of the offer The
servicer must acknowledge receipt of a short sale offer.
- Within 5 business days of receipt of the offer If the
servicer determines that documentation is missing, the
servicer must send an Incomplete Information Notice to the
borrower.
- Within 5 business days of a decision but in no event more
than 30 calendar days after receipt of a complete BRP - The
servicer must respond to the short sale offer
with approve, approve with conditions, deny with
counteroffer, or “still under review.”
- 5 business days after communicating a counteroffer If the
response is “deny with counteroffer,” the servicer must
request a response from the borrower on the purchaser’s
decision of a counteroffer.
- Within 10 business days after receipt of revised offer
The servicer must ensure that revised offers are evaluated
within time frames that enable a decision to be communicated
to the borrower within 10 business days after receipt of the
revised offer.
- 30 calendar days after receipt of the BRP If the
servicer responds with “still under review,” an
extension of 30 calendar days is permitted as long as the
servicer provides weekly verbal or written status updates.
All communication must be documented in the
mortgage loan servicing file.
- Within 60 calendar days of receipt of the BRP and offer -
The servicer must respond with a final decision.
Economic growth flat
Gross domestic product (GDP) expanded at a 2.2 percent
annual rate, the Commerce Department said on Friday in its
advance estimate, moderating from the fourth quarter's 3
percent rate. While that was below economists' expectations
for a 2.5 percent pace, a surge in consumer spending took
some of the sting from the report. However, growth was still
stronger than analysts' predictions early in the quarter for
an expansion below 1.5 percent. Although the details were
mixed, the GDP report offered a somewhat better picture of
growth compared with the fourth quarter, when inventory
building accounted for nearly two thirds of the economy's
growth. In the first quarter, demand from consumers took up
the slack. Consumer spending which accounts for about 70
percent of U.S. economic activity, increased at a 2.9
percent rate - the fastest pace since the fourth quarter of
2010. That compared to a 2.1 percent rise in the fourth
quarter. Business spending fell at a 2.1 percent pace after
rising 5.2 percent in the fourth quarter.
Excluding inventories, GDP is rose at a 1.6 percent rate. In
the fourth quarter, the comparable figure was just 1.1
percent. Elsewhere, growth in the first quarter was held
back by a another drop in government defense spending, which
confounded expectations for a strong rebound. An increase in
exports was offset by a rise imports, causing trade to have
virtually no impact on growth. Separately, civilian
employment costs rose more modestly by 0.4 percent during
the first quarter, primarily because growth in benefits
slowed after a sharp rise in last year's fourth quarter,
Labor Department data showed on Friday. The gain in
employee costs was slightly lower than the 0.5 percent rise
forecast by analysts surveyed by Reuters. Costs had
increased 0.5 percent in the final three months of 2011.
Benefit costs, which account for 30 percent of compensation,
grew by 0.5 percent in the first quarter after a sharp 0.7
percent rise in last year's fourth quarter. Wages and
salaries - the other 70 percent of costs - were up 0.5
percent in the first three months this year, a pickup from
the 0.3 percent gain posted in last year's closing quarter.
Olick - foreclosures return
"Big jumps in foreclosure activity in cities like
Pittsburgh, Indianapolis, New York and Raleigh pushed the
national numbers higher in the first three months of this
year, according to a new report from RealtyTrac, an online
foreclosure sales and data company. A majority of U.S.
housing markets posted a quarterly increase in foreclosure
activity, although the numbers are still down from a year
ago. 'First quarter metro foreclosure trends were a mixed
bag,' said Brandon Moore, chief executive officer of
RealtyTrac, adding that the increase in the number of cities
seeing a quarterly jump is, 'an early sign that long-dormant
foreclosures are coming out of hibernation in many local
markets.' Tracking foreclosure activity is a tricky business
right now, as the system has been roiled with problems left
over from the so-called 'robo-signing' foreclosure paperwork
scandal. The five largest banks signed a $25 billion
settlement agreement earlier this year, requiring them to do
more modifications and write down principal on some troubled
loans. While some expected foreclosure numbers to surge, as
states that require a judge in the foreclosure process
finally start pushing the documents through again, but more
recent data has shown the opposite. As banks work on saving
more loans or doing foreclosure alternatives, like short
sales, deeds in lieu of foreclosure, or deeds for rent
programs, the final foreclosure numbers are falling. New
mortgage delinquencies are also falling, thanks to a slowly
improving jobs picture.
Still, inventories of properties in the foreclosure process
are still abnormally high, and some of the usual markets are
the culprits. Stockton and Modesto, California still have
the highest foreclosure rates in the nation, while Las Vegas
dropped to the eighth spot, with foreclosure activity down
61 percent from a year ago. The Phoenix market is also
improving, although still in the top ten list of foreclosure
rates. Just over 7 percent of U.S. loans were in some stage
of delinquency in March, and 4.14 percent were in the
foreclosure process, according to a new report from Lender
Processing Services. The delinquency number is down almost 9
percent from a year ago, but the foreclosure inventory is
fairly flat, down 1.6 percent from a year ago, but up
slightly from the previous month. 5.6 million properties are
still in some stage of delinquency or foreclosure. These
numbers, negative home equity, and still-tight credit are
the largest impediments to a robust recovery in the housing
market."
Treasury Secretary wants to open markets to China
Treasury Secretary Timothy Geithner said Thursday the United
States was willing to open up its markets to China and give
it more access to U.S. technologies if Beijing made progress
on issues that concern the United States. Also Thursday, a
top GOP lawmaker pressed the Obama administration to
increase pressure on China to make currency and trade
reforms. The comments came ahead of the U.S.-China
Strategic and Economic Dialogue meetings in Beijing next
week. "We are willing to continue to make progress on these
issues, but our ability to do so will depend in part on how
much progress we see from China on issues that are important
to us," Geithner said. He repeated that China's currency,
the yuan, needed to appreciate more rapidly and pledged that
the United States would continue to push aggressively for
fair treatment of U.S. companies doing business with China.
Rep. Dave Camp, chairman of the House of Representatives
Ways and Means Committee, urged the administration to
negotiate an investment treaty with China and to press the
world's second-largest economy to make reforms. "Plain and
simple, we cannot allow China to continue its unacceptable
trade practices," the Michigan Republican said in a speech,
referring to longstanding barriers to U.S. exports and the
widespread piracy and counterfeiting of U.S. goods. "The
litany of China's trade distorting policies is deeply
troubling and cannot be allowed to stand," Camp said. "In
addition, we should pursue a Bilateral Investment Treaty
(BIT) with China." Camp's call for the United States to
begin talks with China on a treaty comes one week before
Geithner and Secretary of State Hillary Clinton travel to
Beijing for high-level talks.
Remodelling Market Index (RMI) flat
Due to a recently discovered computer coding error, the
National Association of Home Builders (NAHB) has revised the
RMI going back to 2006. The error had slightly reduced the
true values of the overall index, as well as its two major
components. The revisions generally show a one point or less
quarterly increase, with quarter-to-quarter patterns
remaining relatively unchanged. Some of the subcomponents
experienced larger revisions but in a counteracting fashion,
so that the impact on the primary indicators was muted.
Remodeling activity remained relatively flat in the first
quarter of 2012, as the Remodeling Market Index (RMI)
compiled by the National Association of Home Builders
decreased one point to 47 from the upwardly revised 48 in
the previous quarter. The overall RMI combines ratings of
current remodeling activity with indicators of future
activity. An RMI below 50 indicates that more remodelers
report market activity is lower (compared to the prior
quarter) than report it is higher.
In the first quarter, the RMI component measuring current
market conditions dropped one point to 49, while the
component measuring future indicators of remodeling business
fell two points to 44. “We are seeing that the demand for
remodeling work has been pulled forward because of a mild
winter,” said NAHB Remodelers Chairman George “Geep”
Moore Jr., GMB, CAPS, GMR and owner/president of Moore-Built
Construction & Restoration Inc. in Elm Grove, La. “That is
why many remodelers reported lower numbers for future
activity.” The three components measuring current market
conditions moved in different directions in the first
quarter: major additions remained even at 44; minor
additions rose one point to 52; and maintenance and repair
dropped four points to 51. Two of the four components
measuring future market indicators decreased: backlog of
remodeling jobs dropped four points to 43 and appointments
for proposals fell five points to 45. Meanwhile, calls for
bids rose one point to 47 and amount of work committed for
the next three months remained even at 42. Regionally,
remodeling market conditions in the West increased three
points to 47, while the other three regions showed declines:
the Northeast to 48 (from 55), the Midwest to 50 (from 52)
and the South to 46 (from 49).
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