Fannie Mae has updated its underwriter servicing tool to make it easier for servicers to determine the eligibility of distressed homeowners for a loan modification.
The update to its Servicing Management Default Underwriter automatically calculates the borrower's full mortgage obligation, including the outstanding principal balance, past due interest and other arrearages to determine eligibility for a standard or streamlined modification.
"With this technology update, our servicers will be able to help more struggling borrowers sooner since we are implementing the policy change directly in the tool," said Joy Cianci, senior vice president for credit portfolio management at Fannie Mae.
Fannie required more detailed information on arrearages in a Sept. 9 servicing guide. Servicers must implement this new policy by March 1, according to an announcement Tuesday about the servicing tool.
Fannie servicers completed 22,000 loan modifications in the third quarter, compared to 28,860 in the third quarter of 2014 and 39,160 in the third quarter of 2013.
During that two-year time frame, the serious delinquency rate on Fannie-guaranteed loans dropped to 1.59% from 2.55% in the third quarter of 2013.
As of Sept. 30, there were 275,548 seriously delinquent (90 days or more past due) loans on Fannie's books, down from 340,897 a year ago.
