Fannie Mae takes another step to ease capital need

[Housebroken13]

This is an old article but interesting:

Fannie Mae takes another step to ease capital need | Reuters

The move allows temporary suspensions or reduced payments by borrowers for up to six months, up from four months, said Jason Allnutt, a vice president for credit loss management for Fannie Mae (FNM.N) in Dallas.

The HomeSaver advance and HomeSaver forbearance programs are bets that the loans can be "cured," or fixed, faster and cheaper than through other loss-mitigation efforts. Such plans will work if servicers use the time to obtain more information from the homeowner, said Rick Smith, chief executive of Marix Servicing LLC in Phoenix, Arizona.
"Fannie Mae is trying to give the servicers as many tools as possible to help homeowners," he said. But "if a servicer does not gather the financial information, then some plans will just delay the inevitable" foreclosure process and increase costs for investors, he said.


Fannie Mae's Allnutt said the company is responding to servicer requests for flexibility in their dealings with delinquent homeowners. Without HomeSaver Advance and HomeSaver forbearance plans, servicers would have pushed borrowers into the more complicated loan-modification process, leading Fannie Mae to extract the loan from the mortgage security, he said.