Industry NewsMortgage

Fannie cracks the foreclosure whip

Servicers warned to meet timelines or face fines

Fannie Mae says it will begin fining loan servicers who take too long to complete foreclosures once it's been determined that delinquent borrowers don't qualify for a loan modification or other alternatives like short sales.The fines -- or "compensatory fees" -- will be assessed when loan servicers can't provide a reasonable explanation for failing to meet timelines for completing routine foreclosures that vary from state to state, Fannie Mae said in a bulletin to servicers.The time allotted to complete a foreclosure, starting from the referral of a loan file to an attorney or trustee until the date of a foreclosure sale, varies from as little as 60 days in Georgia, Michigan, Missouri, Tennessee, Texas, Virginia and West Virginia, to 300 days or more in Illinois, Maine, New Jersey, New York, Vermont and Wisconsin.The foreclosure timelines Fannie Mae has established for the four states hit hardest by foreclosure during the downturn fall in between: 120 days in California and A...

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