Tuesday, May 10, 2011
Bank Regulators Set New Foreclosure Rules
The new rules reportedly will require a single point of contact for borrowers trying to modify loans or in the foreclosure process. Regulators will also require that "appropriate deadlines" be set for banks to give a decision on wether or not a modification or other foreclosure alternative workout can be arranged. Banks will also be required to ensure that staffing is adequate enough to handle the flood of foreclosures and loan modifications in their systems.
Some banks are already taking steps to implement changes and meet the new requirements before the June deadline. For example, J.P.Morgan Chase has announced that it is developing new software programs that will make it easier for borrowers to track loan modification requests. They also claim to now provide each borrower with a "relationship manager"to help them through the loan modification or foreclosure maze.
Citigroup says that they will provide a "concierge" service that will help guide deinquent borrowers at risk of default. Banks and mortgage servicers will also be required to meet new guidelines from Fannie Mae and Freddie Mac that strive for more loan modifications and stronger efforts to keep homeowners in their homes. Servicers will be required to approach borrowers early and frequently after just one missed payment. Fannie and Freddie will reward the servicers for completed modifications and penalize them for failing to meet timelines in the process.
These changes are presently scheduled to go into effect during the 2nd quarter of this year.
GES Real Estate LLC