New Fannie Mae Rules on Foreclosure While In HAMP

Posted on August 11, 2011


As of June, Fannie Mae changed their rules to allow banks to proceed with foreclosure if payments to the bank are more than 90 days past due. The only exception to this rule is if a permanent loan modification is in place.

Anyone with experience working to get a loan modification knows exactly what happens next. The banks will “lose” the loan modification information, wait two months to tell you, then tell you your information is two months out of date and that you need to reapply for the loan modification.

The real purpose of this rule change is to stop all the lawsuits against the banks for not following the HAMP modification requirements that all foreclosure proceedings against homeowners applying for a HAMP modification are stopped. Now, if the loan is over 90 days past due, they can still foreclose. Which means if the loan modification process is dragged out enough, virtually no home loan modifications will be given at all.

Just like now.