By the close of 2011, foreclosures within Fannie Mae and Freddie Mac (which provider for somewhere around 90% of all of the mortgages in the U.S.) must follow precisely the same processes.

In other words, loan servicers within the two (Fannie and Freddie) are going to be compensated if they work and punished if they do not.

These new regulations will direct servicers to get to individuals early on, relate more frequently and clearly, and offer relief.

Here is a brief review of the changes under the new guidelines:

* Loan servicers can never assist homeowners on their loans while on the other hand moving forward with a foreclosure, called a “dual track” by FHFA.

* Loan servicers will need to get in touch with homeowners immediately after they become delinquent and focus completely on remediating that delinquency. Providing the borrower and servicer are involved in a good-faith effort to eliminate the delinquency, a foreclosure can not proceed.

* The servicer must officially evaluate each instance prior to taking any measures to consider the homeowner for any foreclosure options.

* Loan servicers will be compensated for swiftness. If a loan is changed by some means within four months, as an example, the servicer receives $1,600. If it requires beyond seven months, however, the servicer gets only $400.

* Even if the home foreclosure activity has now commenced, loan servicers will be paid a financial incentive as long as they continually assist the homeowners to find an alternative choice to foreclosure.

* There will be a lot fewer documents to submit hence simplifiing the process. It will supply the borrowers 1 application to submit along with the servicers 1 application to examine for all Freddie Mac loan modifications and foreclosure alternatives.

Along with helping at-risk homeowners, the new guidelines will reduce taxpayer losses by making sure (Fannie and Freddie) loans are maintained efficiently and reasonably.

Fannie Mae and Freddie Mac will give out thorough guidelines to their servicers in the second and third quarters of 2011.