Sunday, August 21, 2011

Report: Confidential Records Suggest Fannie Told Servicers To Ignore HAMP Rules When Steamrolling Forward With Foreclosure

In Detroit, Michigan, the Detroit Free Press reports:

  • Confidential records obtained by the Free Press show that Fannie Mae pressed lenders to foreclose on homeowners, even if they were negotiating for a loan modification — a violation of the government’s own rules.

  • Those rules tell banks they “may not refer a loan for foreclosure sale or proceed with a foreclosure sale” while homeowners are seeking loan changes under the federal Home Affordable Modification Program, which was designed to provide mortgage relief.

  • The confidential records are at odds with that promise. They directed banks to foreclose on mortgages more than 12 months delinquent, regardless of whether homeowners were applying for relief. Other documents show that Fannie Mae made clear to banks that Fannie expected a certain percentage of delinquent borrowers to lose their homes.

For more, see Inside Fannie Mae: Confidential records show how Fannie Mae breaks the rules.

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