Fannie Mae Alters Cash-Disbursement Rules On Short Sales, DILs

Fannie Mae is changing the process through which it compensates servicers for short sales and deeds-in-lieu (DILs) of foreclosure.

Currently, the company pays an incentive fee after a servicer closes a case in HomeSaver Solutions Network (HSSN) and after the company receives a request for cash disbursement.

Effective with short sales and DIL transactions closed on or after June 1, Fannie Mae will first review cases for eligibility of incentive fees before making a final determination. Starting with cases closed on or after that date, servicers will no longer have to submit cash-disbursement requests. Instead, Fannie Mae will pay approved incentive fees once per month.

Fannie Mae has also updated its requirements for the way servicers communicate loan modification declinations to borrowers. For all modification declinations issued by the company through HSSN on or after June 15, servicers will have to send an "adverse action notice" to the borrower if the borrower's mortgage is current on the date Fannie Mae advises the servicer of the declination.