Fannie Mae Releases Guidance on HHF Modification Programs
By: Esther Cho
In a recent announcement, Fannie Mae notified servicers of new policies related to Hardest Hit Fund (HHF) modification assistance programs.
HHF provides funds to certain states hit hard by the economic and housing crisis. The funds are administered by Housing Finance Agencies and are used for a variety of mortgage assistance programs.
In the “Servicing Guide Announcement” released July 1, the GSE stated servicers “must accept modification assistance received from a Housing Finance Agency (HFA) for a mortgage loan in connection with any Fannie Mae modification, without regard to whether principal forbearance is required.”
Fannie Mae further clarified that if a borrower completes a trial period plan but the servicer does not receive HFA funds before the due date for the first modified payment, the borrower must be re-evaluated for a modification.
In instances where the borrower no longer qualifies, the case must be sent to Fannie Mae for a decision. In cases where the borrower is eligible for a modification, the servicer must not require the borrower to complete another trial period.
The new policies should be implemented by October 1 though Fannie Mae encourages servicers to start earlier.
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