GSEs Announce Changes to Servicer Incentives

GSEs Announce Changes to Servicer Incentives

BY: ESTHER CHO

Fannie Mae and Freddie Mac are eliminating the $500 incentive for competed borrower response packages starting August 1, according to separate bulletins issued by the GSEs.

Freddie Mac stated the decision to do away with the incentive is because some of the loss mitigation programs are streamlined and don’t require a borrower response package in all circumstances.

The GSEs will also stop assessing a compensatory fee for servicers that don’t meet the minimum performance benchmark starting March 1, 2013.

The GSEs also announced servicer incentives for Home Affordable Modification Program (HAMP) modifications will increase starting April 1, 2014. Compensation go up by $500 for completed modifications where servicing guide requirements are met.

If a borrower is fewer than 120 days delinquent when the trial period plan begins, the incentive amount will be $2,100. The incentive decreases to $1,700 for borrowers past due by 121 to 210 days, and drops to $900 for loans delinquent by more than 210 days.

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