Servicing Notice April 17, 2013

Transcription

1 Servicing Notice April 17, 2013 Fannie Mae is changing the format of the bidding instructions provided in Part VIII, Section :, of the Servicing Guide to help clarify the situations in which specific bidding instructions must be used. To ensure that Fannie Mae will recover the full amount due under the insurance or guaranty contract, the servicer must pay particular attention to any bidding requirements issued by or concerning FHA (Federal Housing Authority), VA (Veterans Administration), RD (Rural Development), hazard damage and/or hazard claims, and private mortgage insurers. Mortgage Loans Endorsed for Insurance Prior to November 30, 1983 Bid amount must include full amount of indebtedness consisting of: unpaid principal balance, accrued interest to the date of sale, any advances for taxes and insurance (T&I), and other foreclosure costs (including attorney s fees and any reimbursable property inspection fees). FHA-Insured Mortgage Loans Mortgage Loans Endorsed for Insurance On or After November 30, 1983 Depends on whether HUD elects to have the property appraised IF HUD has the property appraised, HUD will advise the servicer of the amount that should be bid at the foreclosure sale. IF HUD does not have the property appraised OR the servicer does not receive HUD s bid days before foreclosure sale, the servicer must bid the full amount of Fannie Mae s indebtedness. Other Restrictions If the servicer is holding any funds for a mortgage loan that is: insured under an FHA Escrow Commitment, or subject to an interest rate buydown plan, the held funds must be Bid amount will reflect fair market value of the property, appropriately adjusted for HUD's estimate for holding costs and resale costs that it would incur if the property were 2013 Fannie Mae. Trademarks of Fannie Mae. Page 1

2 subtracted from the total conveyed. indebtedness, and the As long as the servicer servicer must send Fannie receives HUD s bid Mae any funds it holds as soon as the foreclosure sale days before the is held. foreclosure sale, it must bid the exact amount specified by HUD, unless state law requires a higher amount to be bid. IF the servicer does not receive HUD s bid days before foreclosure sale, the servicer must bid the full amount of Fannie Mae s indebtedness. VA-Guaranteed Mortgage Loans VA specifies its upset price. The servicer must bid VA s upset price. VA does not specify an upset price and Fannie Mae has not authorized a VA no-bid buydown. (Part VII, Section 607: VA No-Bid Buydowns) The servicer must determine the bid amount by subtracting the amount VA will pay under its guaranty from the amount required to satisfy the indebtedness. RD-Guaranteed Mortgage Loans Bid amount must include the full amount of indebtedness, consisting of: unpaid principal balance, accrued interest to the date of sale, any advances for T&I, and other foreclosure costs (including attorney s fees and any reimbursable property inspection fees). Hazard Damage Hazard Claim Filed with Insurance Carrier and Claim Amount Known The servicer may issue bidding instructions without contacting Fannie Mae, as long as it instructs the foreclosure attorney or trustee to reduce the applicable final bid amount by the outstanding hazard or flood insurance claim amount. No Hazard Claim Filed with Insurance Carrier The servicer must contact its Portfolio Manager, Servicing Consultant, or the National Servicing Organization s Servicer Solutions Center at to determine whether or not a hazard insurance claim should be filed and, if so, what foreclosure bid should be entered Fannie Mae. Trademarks of Fannie Mae. Page 2

3 All Conventional First-Lien Mortgage Loans Except Co-Op Share Loans in First Position The servicer must issue bidding instructions based on the following guidelines to ensure that a third party's bidding at the foreclosure sale will not result in Fannie Mae's acquiring the property: for more than the total mortgage indebtedness, which consists of the unpaid principal balance of the mortgage loan, accrued interest, advances for T&I, foreclosure costs, and attorney s fees; OR for less than Fannie Mae's make whole amount, which is the total mortgage indebtedness less the amount of any mortgage insurance coverage. Fannie Mae's bidding instructions for conventional mortgage loans take into consideration whether or not: the mortgage loan is insured, the property is located in a state (or jurisdiction) that has a redemption period in which the borrower (or a junior lienholder) can redeem the property for the amount of the foreclosure bid, the property is located in a state (or jurisdiction) that does not have a redemption period, but which levies transfer taxes and/or other related fees and costs on the winning bidder at the foreclosure sale, and the property is located in a state (or jurisdiction) that recognizes Fannie Mae's exemption from the payment of real estate transfer taxes. NOTE: The servicer may obtain an opinion of value for the property to use in establishing the foreclosure bid; however, Fannie Mae will not reimburse the servicer for the cost of obtaining the value opinion unless Fannie Mae specifically instructs the servicer to obtain such an opinion. Redemption State/ Jurisdiction Yes No Uninsured Conventional First-Lien Mortgage Loans State Does Not Levy Taxes OR Fannie Mae Exempt from Taxes Yes or No Yes 100% of total mortgage indebtedness No No The servicer must instruct the foreclosure attorney (or trustee) to enter an initial bid of $100 or any other minimum amount that the state requires in order for the bid to be considered valid. The attorney (or trustee) must be instructed to continue bidding until it either bids an amount equal to 100% of the total mortgage indebtedness Fannie Mae. Trademarks of Fannie Mae. Page 3

4 If the bid amount cannot be increased because the trustee attorney (or trustee) to bid the total mortgage indebtedness. Redemption State/ Jurisdiction State Does Not Levy Taxes OR Fannie Mae Exempt from Taxes Insured Conventional First-Lien Mortgage Loans Yes Yes or No 100% of total mortgage indebtedness, unless the mortgage insurer instructs otherwise. If the mortgage insurer indicates that the bid should be an amount that is less than Fannie Mae s make whole amount, the servicer must instruct the foreclosure attorney (or trustee) to bid Fannie Mae s make whole amount. No Yes The servicer must instruct the foreclosure attorney (or trustee) to enter an initial bid of 80% of the total mortgage indebtedness and to continue bidding, if necessary, until it either bids an amount equal to 100% of the total mortgage indebtedness, unless the mortgage insurer instructs otherwise. If the bid amount cannot be increased because the trustee attorney (or trustee) to bid the greater of Fannie Mae s make whole amount, or the amount specified by the mortgage insurer. No No The servicer must instruct the foreclosure attorney (or trustee) to enter an initial bid of $100 (or any other minimum amount that the state requires in order for the bid to be considered valid) and to continue bidding until the bid is won (as long as the bid does not exceed 100% of Fannie Mae s total mortgage indebtedness) unless the mortgage insurer instructs otherwise. If the bid amount cannot be increased because the trustee attorney (or trustee) to bid the greater of Fannie Mae s make whole amount, or the amount specified by the mortgage insurer. If the mortgage insurer specifies a bid amount that will result in Fannie Mae s paying unnecessarily higher transfer taxes or other 2013 Fannie Mae. Trademarks of Fannie Mae. Page 4

5 avoidable fees and costs that are based on the foreclosure bid amount, the servicer must instruct the attorney (or trustee) to enter an initial bid of $100 (or any other minimum amount that the state requires in order for the bid to be considered valid) and to continue bidding until it either bids an amount equal to Fannie Mae s make whole amount. If a range of bids cannot be accepted from a single bidder, the foreclosure attorney (or trustee) must be instructed to bid the greater of Fannie Mae s make whole amount or the amount specified by the mortgage insurer. Second Liens or Co-Op Share Loans in First Position The servicer must contact its Portfolio Manager, Servicing Consultant, or the National Servicing Organization s Servicer Solutions Center at to obtain bidding instructions Fannie Mae. Trademarks of Fannie Mae. Page 5