Fannie Mae issues new maintenance rules for temporary buydowns

The guidance, Posted on the Fannie site On August 13, in a bulletin, the attention of the secondary market for temporary buydowns will come to new guidelines from Ginnie Mae And Freddie Mac.

Fannie Mae, which buys a large part of the American mortgages, said that managers are expected to advance the borrowers before a buydown ends and their interest rates.

“For mortgage loans subjected to a temporary purchasing plan for interest, serviceers must send notification to the borrower with a pending interest payment 90 days prior to the payment change,” said the company sponsored by the government in its bulletin.

Fannie also gave specific instructions for training situations, depending on the conditions of the buydown agreement:

• Flex -adjustments: Servicers must “apply purchasing funds of interest rate rate to reduce the arrears” and use the Fannie’s updated loan modification agreement form to show the change.
• Late payments: Servicers “may not apply purchase funds from interest rate to reduce the amount of the delinquency in connection with a recovery, refund plan or payment deferment”, unless the agreement allows this specifically.
• Mortgage release: Servicers must “ensure that the borrower waives the reimbursement of any interest buydown funds” linked to the release.

Other changes to the service update include extensive flexibility for payment reminders by “extending the time to send such notifications from the 17th day of delinquency to the 20th day of the month”, with a few exceptions.

That rule will take effect immediately and will formally become on December 1.