Wednesday, June 1, 2011
Federal Rules Governing Foreclosure Alternatives About to be Simplified
Things are about to become at least a little easier for homeowners who have borrowed from the federal government. The two government lenders, Fannie Mae and Freddie Mac, have recently been instructed to work together to create a set of uniform rules for handling delinquent mortgages. The revised rule system will benefit borrowers by requiring the lenders to contact borrowers earlier than is currently required to inform them of delinquency, better communication between lender and borrower, and quicker decision-making on the part of the lenders. In addition, the lenders will be required to push harder for foreclosure alternatives such as loan modifications and short sales, even if an account has already been referred for foreclosure. The consolidated set of rules will become effective as of September 30, 2011, and it is expected that the revisions will provide better loss mitigation options to both lenders and borrowers alike.