Fannie Mae, Freddie Mac and the federal regulators that control them recently released new guidelines for the nation’s 14 largest home loan issuers, which were designed to encourage lenders to grant more home loan modifications, according to a report from the Wall Street Journal. In particular, the rules would require that lenders approach troubled borrowers more frequently and quickly after they miss a single home loan payment.
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“It does raise the bar,” Frederick Cannon, director of research at Keefe, Bruyette and Woods Inc., told the newspaper. “[The overhaul either goes] beyond what was considered best practices for the industry, or [banks] weren’t really complying with best practices.”
The institutions will have until mid-June to formalize plans for amending their foreclosure practices to be more helpful for consumers, and would then have another 60 days to put those new strategies into use, the report said.
[Resource: Misconceptions May Keep Homeowners From Getting Low-rate Refi’s]
Many consumers have lost their homes to foreclosure since the mortgage meltdown began during the recession. However, a large portion of those may have also been the result of the so-called robosigning practices, in which thousands of foreclosures were approved by major lenders without being properly reviewed.
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I think that is a very good move. A lot of foreclosures could be prevented if we did this before. Very happy about this changes indeed.