In an effort to help reverse mortgage servicers with post-foreclosure sale responsibilities and fees, Fannie Mae has updated its loan servicing manual regarding real estate owned (REO) inventory.
Under the changes to its Reverse Mortgage Loan Servicing Manual, Fannie Mae will assume responsibility for ground rents, co-op fees and assessments, and property taxes “for certain properties in Fannie Mae’s REO inventory.” The changes will take effect October 1 and apply to all reverse mortgage loans, according to announcement RVS-2018-03, released last week.
Fannie Mae is extending a 2017 rule that saw it begin to pay property taxes on homes with foreclosure sale dates or mortgage releases issued on or after July 1, 2017.
“We are now accepting responsibility to pay property taxes for all acquired properties in REO inventory, including acquired properties with a foreclosure or mortgage release date that precedes the mentioned effective dates,” the update reads.
Kevin Paperd, the vice president of foreclosure for top reverse mortgage subservicer Celink, said these changes will add regularity to this reverse mortgage servicing process.
“Including all acquired properties and changing the effective date allows Celink to gain operational efficiencies on Fannie Mae’s portfolio and gain consistency in the process,” he said.
Servicers will be responsible for certain tasks, such as ensuring the property’s deed is changed and reflects Fannie Mae as the new owner.
“Under certain circumstances, Fannie Mae may also request the servicer to perform some property management functions that usually would be assigned to a broker, agent, or property management company,” the manual update states, adding that all repair and marketing costs must be approved by Fannie Mae.
Written by Maggie Callahan