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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: default reserves Posted by Schahrzad Berkland on February 18, 2007 at 7:44 PM In Reply to: Re: default reserves posted by Ward-CA- on May 23, 2003 at 9:52 AM Can someone please clarify is this is true, that lenders need to set aside 6x the loan amount as soon as the loan goes into foreclosure? I was told this by a couple lenders, but can't find any reference in the Federal Reserve online regulations. : : I've heard that all lenders are required to keep reserves for their nonperforming mortgage loans, sometimes as much as 6 to 8 times the outstanding principal balance. Is this true? Every lender, or just the major players like Fannie, Freddie, etc. Does this apply to mortgage loan servicers? : =•=•=•=•=•=•=•=•=•=•= : Frank, : Lenders who work under the licensing auspices of federal and state governing entities have to adhere to a variety of reserve requirements, depending upon the particular lender category they belong to. : However, there’s no reserve required of any party who’s just servicing a loan on behalf of its owner. : Hope this helps. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : Can someone please clarify is this is true, that lenders need to set aside 6x the loan amount as soon as the loan goes into foreclosure? I was told this by a couple lenders, but can't find any reference in the Federal Reserve online regulations. : : : : I've heard that all lenders are required to keep reserves for their nonperforming mortgage loans, sometimes as much as 6 to 8 times the outstanding principal balance. Is this true? Every lender, or just the major players like Fannie, Freddie, etc. Does this apply to mortgage loan servicers? : : =•=•=•=•=•=•=•=•=•=•= : : Frank, : : Lenders who work under the licensing auspices of federal and state governing entities have to adhere to a variety of reserve requirements, depending upon the particular lender category they belong to. : : However, there’s no reserve required of any party who’s just servicing a loan on behalf of its owner. : : Hope this helps. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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