Industry News

Fannie Mae sweetens loan workouts

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Fannie follows Freddie, boosts workout incentives Fannie Mae has boosted incentives for loan servicers who engage in workouts with troubled borrowers that help them avoid foreclosure, including repayment plans, loan modifications, short sales and deeds-in-lieu of foreclosure. The new incentives, which apply only to mortgages in which Fannie Mae assumes the risk of loss from borrower default, apply to workouts completed on or after Aug. 11. Fannie Mae will pay $400 when servicers complete repayment plans on loans that are more than 60 days delinquent. Servicers who arrange for borrowers to get current on their mortgage by taking out a HomeSaver Advance personal loan of up to $15,000 will be eligible for incentive payments of up to $700. Servicers will receive $700 for each successful loan modification, but will be prohibited from charging borrowers a $500 administrative fee. Servicers who are able to facilitate short sales will earn up $1,000 to $1,500, depending on how m...