Under the new guidelines which will become effective at the end of 2011.   Loan servicers who are under Fannie Mae and Freddie Mac will be rewarded if they perform well or punished if they do not.

One of the biggest changes will be that lenders will  not be able to go the ” dual track” route, meaning that they would try to work with the homeowner on a loan modification while at the same time move toward a foreclosure.    Now they can do one or the other not both at the same time

The faster that a loan can be modified  the loan servicer will be rewarded  $1,600 if it should take several months the loan servicer would get much less

 Contact to the homeowner  by the bank must be done as soon as they become delinquent.  The idea is to show that the borrower and servicer are engaged in a good faith effort to resolved the delinquency.

The modification process will also be streamlined and reduced to one or two forms. 

All these steps may lead to more modified loans and perhaps more short sales but hopefully less foreclosure activity and to a smoother real estate in market in Miami.

Areas such as  Coral Gables, Coconut Grove ,Pinecrest and South Miami have seen there share of short sales and foreclosures , however other areas in Miami have fallen as much as 60% over the last few years.