ABI Reports on "New" Home Modification Rules to Take Effect in mid-August

Under orders from U.S. regulators, 14 financial institutions have until mid-June to lay out plans to clean up their mortgage-servicing operations - and another 60 days to make the changes, the Wall Street Journal reported today. JPMorgan Chase & Co. said that it would take a $1.1 billion charge related to the consent order and other servicing-cost increases. Citigroup Inc., which services $602 billion of mortgage loans, predicted the changes will boost expenses by as much as $35 million a year. Fannie Mae, Freddie Mac and the Federal Housing Administration yesterday rolled out new guidelines designed to encourage more successful modifications while preventing foreclosures from dragging on. The rules will require servicers to approach borrowers earlier and more frequently after a first missed payment in order to have a better chance at modifying loans. The mortgage titans also will pay more to servicers that meet certain benchmarks and establish timelines for banks to modify loans or process foreclosures.
ABI Wesbite here.

Wall Street Journal article here.

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