The Federal Housing Finance Agency (FHFA), which oversees Fannie Mac and Freddie Mac, has issued a directive outlining specific steps servicers should take to identify and correct potential deficiencies in foreclosure paperwork.
"Delays in foreclosures add cost and other burdens for communities, investors, and taxpayers," said Edward J. DeMarco, FHFA's acting director. "For Enterprise [Fannie Mae and Freddie Mac] loans, delay means that taxpayers must continue to support the Enterprises' financing of mortgages without the benefit of payment and neighborhoods are left with more vacant properties."
"In the absence of identified process problems, foreclosures on mortgages for which the borrower has stopped payment, and for which foreclosure alternatives have been unsuccessful, should proceed without delay," DeMarco said.
Both Fannie Mae and Freddie Mac have issued their own statements in full support of DeMarco's directive.
"These principles will further protect borrowers' rights and help rebuild the integrity of the foreclosure process," said Bruce Witherell, Freddie's COO. "It is critical that servicers quickly identify and remedy process problems in order to avoid costly delays and help restore public confidence in the housing market."
What does this mean? Simply put, the paperwork will be reviewed to correct/prevent improper foreclosures. Foreclosures that should otherwise occur will likely move forward shortly.
Seven Gables Real Estate
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