The Treasury Department will pay mortgage servicers more for modifying loans in an earlier stage of delinquency and less the longer the process takes, according to guidelines released July 6, 2011.
The guidelines, effective October 1, will be adopted by Fannie Mae when the Federal Housing Finance Agency releases the new mortgage servicing fee structures.
Through HAMP, a servicer receives $1,000 when a homeowner is placed in a verified income trial modification for three months before becoming permanent. Effective October 1, mortgage servicers will receive $1,600 if the trial starts before a loan becomes more than 120 days delinquent, $1,200 for loans between 121 days and 210 days delinquent and $400.00 for loans placed in the trial stage after being 210 days delinquent.
Servicers are prohibited from requiring borrowers to make past due payments before entering a trial modification which would result in a higher fee for the servicer.
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