| Fannie Mae LL 04-08 Issuance of a Temporary Halt to Foreclosures and Evictions |
| Thursday, 20 November 2008 | |
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Fannie Mae has released Lender Letter 04-08 titled, " Issuance of a Temporary Halt to Foreclosures and Evictions".
In connection with the streamlined modification program announced jointly by the Federal Housing Finance Agency (FHFA), Freddie Mac, and Fannie Mae on November 11, 2008, Fannie Mae is instituting a halt to all foreclosure sales on occupied single-family properties as well as to the completion of evictions from occupied singlefamily properties scheduled to occur from November 26, 2008 through January 9, 2009. The temporary halt on foreclosures is designed to allow affected borrowers facing foreclosure to retain their homes while Fannie Mae works with FHFA to implement the streamlined modification program scheduled to launch December 15, 2008. The foreclosure halt will apply to all portfolio mortgages and all MBS pool mortgages owned or guaranteed by Fannie Mae and to foreclosures of homes that are already in process with foreclosure sale dates scheduled during the halt period. Servicers and foreclosure attorneys (or trustees) must institute the halt on foreclosures for eligible homeowners no later than November 26, 2008. Eligibility – Foreclosures The temporary foreclosure halt applies to single-family properties which have or will have a foreclosure sale date scheduled to begin on or after November 26, 2008 and through January 9, 2009 and where the property is occupied. If the servicer, attorney, or trustee has knowledge that the property is vacant, the foreclosure sale should continue as scheduled. If the servicer, attorney, or trustee is unsure whether a property is occupied, the servicer, attorney, or trustee should assume that the property is occupied. During this period servicers are expected to continue working with borrowers to resolve the delinquency using Fannie Mae’s available foreclosure prevention options. To facilitate borrower communication with servicers, servicers must instruct foreclosure attorneys and trustees to send a letter to each impacted borrower urging the borrower to contact his or her servicer. Attachment 1 contains a sample letter that attorneys and trustees may use for this purpose. This initiative does not affect mortgage loans that have not yet been referred to foreclosure. Servicers and foreclosure attorneys (or trustees) should follow the foreclosure policy guidance contained in the Fannie Mae Servicing Guide for all loans previously referred and for all new referrals as long as such actions do not result in foreclosure sales being scheduled during the halt period. Eligibility – Evictions Fannie Mae is also implementing a temporary halt on the completion of eviction lockouts of occupied properties beginning November 26, 2008 and ending on January 9, 2009. This initiative does not affect foreclosed properties where eviction actions have not been initiated. Fannie Mae will continue to initiate the eviction process on acquired properties during the period but these actions will not result in lockouts being scheduled on occupied single-family properties during the halt period. Fannie Mae will provide separate guidance to the eviction attorneys to implement the halt of eviction lockouts during the halt period. Delinquency Status Reporting and Tracking Servicers should continue to report the “delinquency status” and “reason for delinquency” codes and delinquency code “effective dates” when transmitting monthly delinquency status information as described in the Servicing Guide, Part VII, Chapter 6: Delinquency Status Reporting. Each servicer must maintain a schedule of all foreclosure sales affected by the halt. This schedule should include the Fannie Mae loan number and the date on which the sale was scheduled to occur. Each servicer should provide the schedule each month for the months of November 2008 through January 2009. Schedules should be submitted within 10 business days after the end of each month and the schedule should be submitted to Fannie Mae via e-mail to the following address: foreclosure_halt@fanniemae.com. Any questions regarding this Lender Letter should be directed to the National Servicing Organization’s Servicing Solutions Center at 1-888-326-6438 (option 2 – Servicing, then option 3 – General Servicing). To view the Lender Letter in its entirety along with the aforementioned Attachment, please click here.
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