The Federal Housing Finance Agency (FHFA) released a set of new rules for the sale of troubled mortgages by U.S.-owned Fannie Mae and Freddie Mac, Bloomberg News reported yesterday. FHFA, which oversees the government-sponsored enterprises, will require prospective investors to prove they’ve retained a loan servicer with a track record of handling delinquent debt, the agency said yesterday. Servicers also will have to offer aid to avoid foreclosures as a condition of sale. Fannie Mae and Freddie Mac are under orders from FHFA to reduce their holdings of delinquent loans. Freddie Mac has auctioned off more than $1 billion in deeply delinquent debt since July in two separate bulk sales. Fannie Mae hasn’t yet conducted any bulk auctions of defaulted mortgages. With the new requirements, “sales by Freddie Mac and Fannie Mae will result in more favorable outcomes for borrowers and local communities, while also reducing losses to the enterprises and, therefore, to taxpayers,” said FHFA Director Melvin L. Watt.
