Fannie Mae To Streamline Past-Due Payments For Homeowners Associations Effective July 1

Many borrowers live in a community with either Homeowners Associations fees or condominium fees, and a new Fannie Mae rule set to take effect on July 1, 2012 will make it easier for such associations to collect dues they are owed by mortgage servicers.

Fannie Mae’s regulation at the present requires servicers to clear all liens for delinquent HOA dues and condo assessments on properties that have been obtained through foreclosure or deed-in-lieu of foreclosure. In cases where the lender’s first mortgage position is considered to be at risk and the borrower’s amounts owed are more than 60 days late, the servicer is required to advance the payment.

Servicers, however, tend not to keep records of HOAs when they originate loans, which makes it difficult to contact the HOAs about unpaid dues, especially when the HOAs’ contact information or staff changes.

Read on.

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