Fannie Mae Raises Mortgage Servicer Incentives

Reuters (08/12/08); Adler, Lynn
Fannie Mae hiked the incentive fees it pays servicers for successful modifications on conventional mortgages to $700, but it ordered servicers to discontinue imposing $500 fees on borrowers for administrative processing costs. However, out-of-pocket expenses for credit reports and other documents still can be passed onto borrowers. The government-sponsored enterprise's Web site notes, "Incentive fees are only applicable to mortgage loans serviced under the special servicing option, in which Fannie Mae assumes the risk of loss from borrower default." The fees apply to repayment and loss mitigation plans commencing on Aug. 11.