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Fannie to inspect delinquent homes

By Polyana da Costa · Bankrate.com
Wednesday, June 8, 2011
Posted: 9 am ET

If you happen to see a contractor walking around your house, taking pictures, don't panic. It's just your lender "inspecting" your property.

According to new rules announced by Fannie Mae this week, mortgage servicers will be required to "order" a "property inspection" no later than 45 days after a homeowner misses a mortgage payment. "The servicer must continue to obtain property inspections every 30 days thereafter" until the delinquency is resolved.

If the servicer determines that the property is abandoned "the servicer must perform an interior inspection upon confirmation of abandonment," according to Fannie's guidelines, which go into effect on Sept.1

Fannie's current policy requires inspections only when servicers are unable to reach delinquent borrowers or when they determine the borrower isn't willing to try to work out a solution. But the inspections are not required until the mortgage is 135 days delinquent or the servicer begins foreclosure proceedings.

The new policy is an extra effort to try to protect Fannie's investment in these assets.  But has Fannie heard of the widely reported stories of banks breaking into people's homes to "inspect" and "secure" them, claiming the homes are vacant when they are not?

For example, there is the story Nancy Jacobini in Orlando. Late last year she called 911, desperately asking for help as a man tried to break into her house.  After police arrived, she learned that the man was a contractor who wanted to "secure" her home on behalf of her lender, Chase. The inspector said he thought the house was vacant. A Chase spokeswoman has told me this was an isolated mistake and that they have apologized to Jacobini.

Speaking of mistakes, you might want to know that some of these lender/servicer break-in cases that have been reported over the last two years involved homeowners who were current on their mortgages.

But let's get back to the new policy.

First, it's important to understand how this works and the number of people involved in this process. Servicers don't hire and train their own inspectors. They hire a property management company, which then hires contractors to go out and do the "inspections."

The question is how does the servicer's inspector determine whether a home is vacant before securing it? Do they peek through your window? Do they assume your home is vacant if you haven't mowed your grass and happen to be on vacation?

A Fannie spokeswoman says the process involves various steps and it includes checking to see if utilities are on, if there are people in the house and if there is furniture in the property.

But how do you know if there is furniture in the property before you enter the house?

The spokeswoman declined further comment beyond what is explained in the guidelines.

According to the guidelines, "The servicer must be able to obtain a signed copy of the inspection report that first reported the vacancy, in which the person who actually performed the inspection certifies that he or she has personally gone to the property location and confirmed that the property is vacant."

To avoid any misunderstandings, on top of paying your mortgage you should probably make sure you pay the utility bills before you go out of town.

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11 Comments
Larry Copeny
July 09, 2011 at 4:30 pm

Would like to contact Fannie Mae on some desirable FOH's in and around Orlando Florida even going well north of it.Ready to move to a nice needed ranch in warmer climate.Can't move around as well since getting ran over.The colder climate bothers me as does trying to go up and down the stairs in this 6,000 sq.ft. with many updates in home living here in Grand Blanc,MI.Well worth 600K or more but,due to housing market problems you could get it for about 52% of said cost.I'm willing to sell it myself for 287K to pay off balance just so i can pack up & start the move down to FL. A wonderful sub. live by people rolling in Money and I'm not one of them.My money been used to pay off my medical bills. I Give All Glory to JESUS for Letting me Live.
Thanks L.C.

Mark W
June 28, 2011 at 1:04 pm

As long as property taxes exist, the IS no property ownership by individuals. THE STATE OWNS ALL PROPERTY AND COLLECTS 'RENT' IN THE FORM OF TAXES.
If you are surprised to discover that you don't own your home, read my blog about the Property Tax at basspig.wordpress.com and become enraged enough to march on your government.

dani
June 10, 2011 at 9:29 am

people dont be scared by no servicing companys, as long as you are the owner and the lender did not get your home anyone
who enter your home shuld be reported to the local police,
and dont be scared to take an attorny to sue the servicer
for criminal breaking of entry

Letty
June 09, 2011 at 6:31 pm

Let me tell you this. The bank can not enter your home even if it is to secure it even if you dont live there. You could have had it rented and now it is vacant. Until the bank forecloses they can not do a thing unless the home is abandoned then they have a right to secure their investment but the guidelines should include contacting the property owner via certified mail and phone calls to find out the status of the property they should advise them and the court that they will be securing the property within x amount of days if they dont respond. Its like a landlord coming in and changing the locks getting rid of your personal belongings without a ruling from the court. These big corporations are not above the law but they act like it and until we dont stand up for our rights they will continue to get away with it!

matt weidner
June 09, 2011 at 5:09 pm

It's long past time for Americans to wake up. These are not harmless invasions into our basic rights, these are predicates to the absolute destruction of all property rights. A written policy that allows them to kick down doors is a violation of fundamental rights.....
Polyana, please contact me for more information.

paola
June 09, 2011 at 2:24 pm

great story. very well researched and informative.

Looking
June 09, 2011 at 2:59 am

Also many of these people are not checked out, before they are sent to inspect properties. They can have criminal records and that does not make them ineligible to prowl around someone's home.

Looking
June 09, 2011 at 2:56 am

They will have a locksmith or one of their "field service agents", pick your lock and look inside to see if anything is there.

They are only supposed to "peep", but many times they will go through the property.

Mirro
June 09, 2011 at 12:53 am

Vacant and Abandoned are two differentt things. How do the break-and-enter people know the difference?

WFMortModScam
June 08, 2011 at 8:43 pm

I really don't know what country I'm living in when I wake up in the morning sometimes. It is so sad seeing this country that has stood for hope and freedom for some many people for so long turning into a fascist regime. It makes me seriously think about emigrating ... but where?

Of course, on some level it makes perfect sense that the banks and Fannie Mae want to have a look at these houses before they steal them from people. They don't want to own a bunch of ugly real estate, now do they?!