The Federal Housing Finance Agency announced yesterday that Fannie Mae and Freddie Mac will require servicers to suspend foreclosure activities for up to 60 days if the servicer has been notified that a borrower has applied for assistance from the Treasury Department’s Homeowner Assistance Fund (HAF).
HAF is a federal program that provides money to states, tribes, and territories to assist homeowners with housing costs. These funds can be used to pay down delinquent amounts, so that borrowers can avoid foreclosure or be better positioned for loss mitigation assistance.
Last month, the CFPB published a blog post in which it strongly encouraged mortgage servicers to participate in HAF programs. The CFPB advised servicers that they must ensure borrowers are not improperly referred to foreclosure while the servicer is working with a borrower during the HAF application process or waiting for payment of HAF funds.