The Federal Housing Finance Agency (FHFA) said Wednesday that foreclosures "should proceed without delay" if servicers have not identified any problems with foreclosure documents.

"A servicer that has identified no deficiencies in its foreclosure processes should not postpone its foreclosure activities," FHFA said.

The agency also called on Fannie Mae and Freddie Mac to implement a four-point plan in managing potential errors in the foreclosure process.

Earlier this month, the agency announced that both government-sponsored enterprises would be working with their respective servicers to identify deficiencies in the foreclosure process and develop a consistent approach to address problems.

But with more mortgage servicers disclosing shortcomings, the agency said it has taken a further step by asking the GSEs to use a framework that includes guidance of consistent remediation of identified deficiencies.

The framework basically tells servicers to work with a foreclosure attorney to refile problematic paperwork with the local courts.

Delaying the foreclosure process "means that taxpayers must continue to support the enterprises' financing of mortgages without the benefit of payment and neighborhoods are left with more vacant properties," FHFA said. "Delays in foreclosures add cost and other burdens for communities, investors and taxpayers."

Fannie and Freddie told mortgage servicers last week to immediately review their policies and procedures related to the execution of affidavits, verifications and other legal documents in the foreclosure process.

FHFA went further, telling servicers that if internal review reveals deficiencies, the servicer has to work with a foreclosure attorney to prepare and file a replacement affidavit before proceeding to foreclosure. If a foreclosure has already taken place, a servicer has to file a motion to substitute a properly completed replacement affidavit with the court to amend the foreclosure judgment, FHFA said.

For properties already owned by Fannie and Freddie, servicers have to review the documents and work with a foreclosure attorney before an eviction can proceed. They also have to substitute a properly prepared affidavit to ratify the foreclosure judgment or confirm a foreclosure sale, FHFA said.

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