This AN updates AN 4165, which expired on April 30, 2007 and introduces the availability of a one-time loss mitigation incentive for either a pre-foreclosure sale or deed-in-lieu of foreclosure, lifting of the 12 month seasoning requirement for a loan modification, and clarification on servicer monitoring of pre-foreclosure sale plans. Effective with the date of this AN all lender/servicers that assist a borrower by approving and closing either a pre-foreclosure sale or deed-in-lieu of foreclosure will receive a one time loss mitigation incentive. Amendments include;

• All servicers that have received prior approval from the Agency for either a pre-foreclosure sale or a deed-in-lieu of foreclosure on a SFHGLP loan will receive a one-time loss mitigation incentive at the time of loss claim filing. The incentive will be included in the loss claim reimbursement amount received by the servicer. The following loss mitigation incentive amounts will be paid to servicers on closed pre-foreclosure sales and deeds-in-lieu of foreclosure:
  Pre-foreclosure Incentive : $1,000.00
  Deed-In-Lieu of Foreclosure Incentive : $250.00

• The requirement that a loan must be seasoned 12 months prior to a loan modification being approved has been eliminated.

• Properties that are listed for sale under an Agency approved 90 day preforeclosure sale plan, should be evaluated monthly by the lender and mortgagor in order to ensure that the property is being marketed to reflect current local economic conditions.