Safeguard Properties - Fannie Mae Changes to Loan Modification Agreements

Fannie Mae Changes to Loan Modification Agreements

Tuesday, 03 February 2009

Fannie Mae has issued the following Servicing Policy Update.

Effective immediately, Fannie Mae has made changes to the language in its Loan Modification Agreements to remove any reference to borrowers waiving their right of set-off or counterclaim, or any defense to obligations under their loan documents ("Borrower Waiver Provisions"). Please use the latest version of the affected agreements posted on eFannieMae.com.

Fannie Mae has also decided that any existing Borrower Waiver Provision should not be enforced. Because of this change, you (and your counsel) should cease enforcement of the Borrower Waiver Provision in any outstanding loan modification documentation. NOTE: this policy change does NOT require you to redraft Loan Modification Agreements that are currently out for signature.

Borrower Waiver Provisions also may include any additional provision(s) a servicer may have added to any of the affected agreements or other loss mitigation related agreements which are similar in substance to a Borrower Waiver Provision.

The impacted form and special purpose documents, and the sections which contain Borrower Waiver Provisions, include:

Form:
NUMBER	TITLE	SECTION
Form 181	Agreement for Modification or Extension of Mortgage	(3)

Special Purpose Legal Documents:
NUMBER	TITLE	SECTION
3161	Loan Modification Agreement (Providing for Adjustable Interest Rate)	Section 4.(c)
3162	Loan Modification Agreement (Providing for Step Interest Rate)	Section 5.(c)
3169	Streamlined Modification Program Workout Plan and Modification Agreement	Section 4.E.
3172	New York Consolidation, Extension and Modification Agreement	Section V.
3179	Loan Modification Agreement (Providing for Fixed Interest Rate)	Section 5.(c)

To view the online update, please click here.

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 500 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.