Fannie Sets New Foreclosure Timeframe for Florida, More

Fannie Mae has established new foreclosure timeframes for four states – Florida, Maryland, Nevada and New York – telling seller/servicers they face potentially steep fines if they cannot complete the task.

In a recent servicing announcement sent to seller/servicers, the GSE increased what it calls the "allowable time frame" for Florida foreclosures to 185 days, a 35-day increase. Fannie said it added days "to allow for a mediation referral prior to a foreclosure suit being commenced."

The new foreclosure deadline for Maryland is 90 days. For Nevada it's 150.

Fannie gave New York State two time frames: 300 days for upstate, but 420 days for New York City (the five boroughs) and Long Island.

The servicing bulletin (SVC-2010-12) excludes information on the prior time frame for these states. It was issued by Gwen Muse-Evans, vice president and chief risk officer for credit portfolio management.

The GSE specifies that these new time frames are for "routine foreclosure proceedings." The clock starts ticking on the count when the servicer refers the loan to an attorney for foreclosure.

Two weeks ago, news broke that the GSEs were going to get tougher on foreclosures but few details were available publicly. Fines will be assessed to mortgage bankers based on the outstanding loan balance. If a servicer submits a late 'REOgram' it faces a fine of $100 a day.

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