Fannie Assists 110,000 Borrowers
Noting that 1.5 million U.S. homeowners faced foreclosure proceedings last year, Fannie Mae says it either refinanced or worked out a delinquency for 110,000 subprime mortgage borrowers last year.
Nearly 68,000 of those subprime borrowers were refinanced into prime-rate loans, the company said. The company provided $13 billion in financing for subprime borrowers. About 42,000 additional subprime borrowers received repayments, modifications, deferrals and other loss mitigation to keep them in their homes. Loan workouts are running at a pace of 840 a week, Fannie Mae said.
Fannie Mae pays an incentive to foreclosure attorneys to work with borrowers to seek foreclosure alternatives.
In addition, Fannie Mae says it delegates 80% of all loss mitigation decisions to servicers without requiring prior approval from Fannie Mae. Fannie Mae has also increased incentive fees for servicers to work out loans and refer borrowers to counseling agencies.
One tool for aiding troubled borrowers is Fannie Mae's HomeSaver Advance, a loan to help qualified delinquent borrowers catch up on their payments. (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/