“A compensatory fee not only compensates Fannie Mae for damages but also emphasizes the importance placed on a particular aspect of the servicer’s performance,” the GSE stated in its servicing guide.
Fannie also updated the allowable foreclosure time frames for four states: Florida – 185 days; Maryland – 90 days; Nevada – 150 days; New York (upstate) – 300 days; and New York (downstate) – 420 days.
To remediate a specific problem affecting a loan or correct the servicer’s overall performance, Fannie Mae reserves the right to impose a compensatory fee as provided in the Servicing Guide, Part I, Section 207: Imposition of Compensatory Fees.
- With this Announcement, Fannie Mae:
- has updated the allowable foreclosure time frames for four states;
- is monitoring all delinquent loans in Fannie Mae’s portfolio or MBS pools, and will begin notifying servicers of delays in processing delinquent loans;
- may begin conducting reviews of servicer loan files, processes, or procedures;
- requires accurate and timely reporting on the delinquency status of mortgage loans; and,
- will exercise its remedy to assess compensatory fees as deemed necessary.
Effective with the date of this Announcement, any mortgage loan referred to an attorney (or trustee) to initiate foreclosure proceedings with properties located in the States of Florida, Maryland, Nevada, and New York must meet the new foreclosure time frames noted below:
- Florida – 185 days
This timeline has an additional 35 days added to allow for a mediation referral prior to a foreclosure suit being commenced.
- Maryland – 90 days
This timeline begins when the case is referred to an attorney to file suit together with a Loss Mitigation Affidavit. The servicer must execute a Final Loss Mitigation Affidavit at the commencement of the case, if appropriate. If a Preliminary Loss Mitigation Affidavit is required, then the time frame allowed will be extended to 120 days.
- Nevada – 150 days
- New York (Upstate) – 300 days
- New York (Downstate) – 420 days
In the State of New York, a timeline of 300 days applies to all localities except for New York City and Long Island.
A timeline of 420 days applies for foreclosures conducted in the five boroughs of New York City — Bronx, Brooklyn (Kings County), Manhattan (New York County), Queens, and Staten Island (Richmond County) — and on Long Island (Nassau and Suffolk Counties).
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