New Fannie Mae Adjustments to Incentive Payments for Preforeclosure properties

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Today Fannie Mae announced:

New Incentive Payment Process for Preforeclosure Sales and Deeds-in-Lieu of Foreclosure

Servicing Guide, Part VII, Section 604: Preforeclosure Sales; Section 604.07: Accounting and Reporting; Section 606: Deeds-in-Lieu of Foreclosure

Announcement SVC-2011-05

Currently, Fannie Mae will pay a servicer an incentive fee for each successful and eligible preforeclosure sale and deed-in-lieu of foreclosure completed. Eligible incentive fees are paid after a servicer closes a case in HSSN and Fannie Mae receives the Cash Disbursement Request (Form 571).

Effective with preforeclosure sales and deeds-in-lieu of foreclosures closed on or after June 1, 2011, after the servicer enters a closed case into HSSN, Fannie Mae will review the case for eligibility of incentive fees and make a final determination based on the case information provided by the servicer. Approved incentive fees will be paid to servicers once per month in the month following the month in which the preforeclosure sale or deed-in-lieu of foreclosure case was closed in HSSN. The servicer is no longer required to submit Form 571 requesting payments for preforeclosure sale and deed-in-lieu of foreclosure incentive fees for any cases closed on or after June 1, 2011.

For all cases closed in HSSN prior to June 1, 2011, the servicer must submit Form 571 to Fannie Mae within 30 days of the date the servicer closes a case in HSSN. In addition, servicers must continue to submit Form 571 to request reimbursement of eligible expenses related to preforeclosure sales or deeds-in-lieu of foreclosure, such as taxes and insurance.

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