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Servicing Alignment Initiative

FHFA, Fannie Mae, Freddie Mac

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Servicing Alignment Initiative - Purpose

Consistent set of requirements for both GSEs

Aggressive and earlier intervention

Clear expectations regarding borrower outreach,

collection of borrower information, and evaluation for

foreclosure alternatives

Incentives to pay for effective practices

Penalties for poor performance

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Implementation

Effective date = October 1, 2011

No additional changes planned

Clarification only, in response to lender questions

and communications with state attorneys general

Servicer solicitation at 30 or 60 days, based on

risk models

Borrower response package to defer referral,additional 10 days to submit hardship evidence

Upon attorney notification, borrower provided 30days to respond

Borrower response at 14 days prior to sale mustbe in writing to postpone sale

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Servicing Alignment Initiative Penalties and Incentives

Borrower Package

Borrower package = $500

Penalty threshhold = 50%

Incentive threshhold = 60% Of 60+ DQ, how many borrower response packages

received.

Will not be offered / imposed until 6 months of

aggregated data

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Servicing Alignment Initiative Penalties and Incentives

Workout Incentives

120 days = $1600

121 210 days = $1200

210 days or more = $400 Fannie Mae will only pay if 50% of borrower

response packages pull through to workouts

Freddie Mac will pay for all workouts, per the above

schedule

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Servicing Alignment Initiative Penalties and Incentives

Foreclosure Timelines Compensatory Fess

Aligned across GSEs

Longer timelines to accommodate state actions

Fannie

implemented for all foreclosures in 2011 Freddie based on foreclosure referrals on or after

10/01/2011

Uniform exceptions for : bankruptcy, probate,

military indulgence, contested foreclosure, HAMPreview/HAMP trials

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Meg Burns, FHFA

Office of Housing and Regulatory Policy