Servicing Guide - fanniemae.com

1 Servicing GuideFannie Mae Single FamilyPublished 04/10/201904/10/2019 Printed copies may not be the most current version. For the most current version, go to the online version at Mae Copyright Notice 2019 Fannie Mae. No part of this publication may be reproduced in any form or by any means without Fannie Mae s prior written permission, except as may be provided herein or unless otherwise permitted by law. Limited permission to reproduce this publication in print in whole or in part and limited permission to distribute electronically parts of this publication are grant-ed to Fannie Mae-approved lenders, servicers, and other mortgage finance professionals, strictly for their own use in origi-nating mortgages, selling mortgages to Fannie Mae, or Servicing mortgages for Fannie Mae. Fannie Mae may revoke these limited permissions by written notice to any or all Fannie Mae-approved full electronic version of this publication is also available on AllRegs website of Ellie Mae, Inc.

2 If there should ever be a difference between this publication as it appears on the AllRegs website and the version published by Fannie Mae, the difference is an error. In such event, the Fannie Mae version of this publication shall be deemed the correct authoritative version. Material discrepancies between the two versions, identified by Fannie Mae or otherwise brought to our attention, may be addressed by acknowledge and agree (individually and on behalf of the entity for which you are accessing this publication, "You") that You may not make any claim against Fannie Mae or Ellie Mae for any errors, and: (i) neither Fannie Mae nor Ellie Mae shall be liable to You for any losses or damages whatsoever resulting directly or indirectly from any errors, and (ii) Ellie Mae ex-pressly disclaims any warranty as to the results to be obtained by You from use of the AllRegs website, and Ellie Mae shall not be liable to You for any damages arising directly or indirectly out of the use of the AllRegs website by copies may not be the most current version.

3 For the most current version, go to the online version at of ContentsPreface ..xiiiPart A, Doing Business with Fannie Mae ..1 Subpart A1, Contractual Obligations..2 Chapter A1-1, Understanding the Lender Contract ..3A1-1-01, Application and Approval of Seller/Servicer (03/14/2018)..3A1-1-02, Representation and Warranty Requirements (08/16/2017)..6A1-1-03, Evaluating a Servicer s Performance (11/25/2015)..8 Chapter A1-2, Termination of the Lender Contract without Cause ..11A1-2-01, Servicer s Termination of the Lender Contract (11/12/2014)..11A1-2-02, Fannie Mae s Termination of the Lender Contract without Cause (11/12/2014)..12 Chapter A1-3, Repurchases, Indemnifications, and Make Whole Payment Requests ..15A1-3-01, Requirements for Voluntary Repurchase (11/12/2014)..15A1-3-02, Fannie Mae-Initiated Repurchases, Indemnifications, Make Whole Payment Requests and Deferred Payment Obligations (08/17/2016).

4 18A1-3-03, Repurchase Obligations Related to Bifurcated Mortgage Loans (02/15/2017) ..36A1-3-04, Reporting the Repurchase (11/12/2014) ..45A1-3-05, Redelivering a Mortgage Loan (11/12/2014)..46A1-3-06, Automatic Reclassification of MBS Mortgage Loans (09/18/2018) ..46A1-3-07, Custodial Document Requirements (06/21/2017) ..48 Chapter A1-4, Breach of Contract and Nonperformance..49 Section , Remedies Available to Fannie Mae .. , Defining a Breach of Contract (06/21/2017) .. , Fannie Mae s Remedies (08/17/2016) ..51 Section , Imposition of Compensatory Fees .. , Compensatory Fees Other Than Delays in the Liquidation Process (02/15/2017).. , Compensatory Fees for Delays in the Liquidation Process (02/13/2019)..59 Subpart A2, Getting Started with Fannie Mae..62 Chapter A2-1, Servicer Duties and Responsibilities ..63A2-1-01, General Servicer Duties and Responsibilities (07/12/2017).

5 63A2-1-02, Servicer s Duties and Responsibilities Related to MBS Mortgage Loans (07/13/2016) ..67A2-1-03, Execution of Legal Documents (11/12/2014) ..71A2-1-04, Note Holder Status for Legal Proceedings Conducted in the Servicer s Name (06/21/2017) ..72A2-1-05, Use of Fannie Mae Trademarks (08/16/2017)..74A2-1-06, Subservicing (02/15/2017)..75A2-1-07, First Lien Mortgage Loan Requirements (11/12/2014) ..78A2-1-08, Compliance with Requirements and Laws (02/14/2018)..82 Chapter A2-2, Refinance and Lending Practices..83A2-2-01, Refinance and Lending Practices (02/14/2018) ..83 Chapter A2-3, Servicer Compensation ..85A2-3-01, Servicer Compensation (12/14/2016) ..85A2-3-02, Servicing Fees for Portfolio and MBS Mortgage Loans (10/14/2015) ..87 Printed copies may not be the most current version. For the most current version, go to the online version at , Yield Differential Adjustments (08/16/2017).

6 88A2-3-04, Late Charges as Compensation (11/12/2014)..89A2-3-05, Fees for Special Services (11/08/2017) ..90A2-3-06, Prepayment Premiums (11/12/2014)..92 Chapter A2-4, Fannie Mae s Quality Control Review ..93A2-4-01, Quality Control Reviews (08/17/2016)..93 Chapter A2-5, Individual Mortgage Loan Files and Records..99A2-5-01, Ownership and Retention of Individual Mortgage Loan Files and Records (12/13/2017) ..99 Chapter A2-6, Custodial Documents ..101A2-6-01, Custodial Documents (06/21/2017)..101 Chapter A2-7, Servicing Transfers ..103A2-7-01, Concurrent Servicing Transfers (04/11/2018) ..103A2-7-02, Pledge of Servicing Rights and Transfer of Interest in Servicing Income (11/25/2015) ..107A2-7-03, Post-Delivery Servicing Transfers (09/18/2018) ..113 Chapter A2-8, Mortgage Electronic Registration System ..125A2-8-01, Mortgage Electronic Registration System (04/10/2019).

7 125 Subpart A3, Maintaining Fannie Mae Seller/Servicer Status ..126 Chapter A3-1, Maintaining Fannie Mae Seller/Servicer Status ..127A3-1-01, Maintaining Fannie Mae Seller/Servicer Status (02/15/2017) ..127 Subpart A4, Setting Up Servicer Operations..129 Chapter A4-1, Establishing and Implementing Internal Operations for All Mortgage Loans and Acquired Properties .130A4-1-01, Staffing, Training, Procedures, and Quality Control Requirements (12/12/2018) ..130A4-1-02, Establishing Custodial Bank Accounts (04/12/2017)..138A4-1-03, Addressing Borrower Inquiries and Disputes (12/12/2018)..143 Chapter A4-2, Requirements for Delinquent Mortgage Loans and Mortgage Loans at Risk of Default ..147 Section , Establishing Default Management Strategies.. , Preventing Defaults and Managing Delinquencies (06/08/2016) .. , Property Inspection Vendor Management and Oversight (11/12/2014).

8 , Managing Short Sales (06/21/2017) .. , Establishing Contact with the Borrower (12/16/2015).. , Requirements for Collection and Foreclosure Prevention Strategies Unique to Second Lien Mortgage Loans (11/12/2014).. , Adverse Action Notification Certification (06/10/2015) ..153 Section , Requirements for Default-Related Law Firms.. , Selecting and Retaining Law Firms (11/12/2014) .. , Law Firm Management and Oversight (11/12/2014).. , Prohibition Against Servicer-Specified Vendors for Fannie Mae Referrals, Use of Vendors, and Outsourcing Companies (04/12/2017) .. , Law Firm Suspensions, Matter Transfers, and Terminations (08/15/2018) ..164 Part B, Escrow, Taxes, Assessments, and Insurance ..167 Chapter B-1, Escrow Account Administration ..168B-1-01, Administering an Escrow Account and Paying Expenses (06/13/2018) ..168 Chapter B-2, Property Insurance Requirements..173 Printed copies may not be the most current version.

9 For the most current version, go to the online version at , Property Insurance Requirements Applicable to All Property Types (12/12/2018)..173B-2-02, Property Insurance Requirements for Mortgage Loans Secured by a One- to Four-Unit Property (10/14/2015)176B-2-03, Property Insurance Requirements for Mortgage Loans Secured by a Unit in a PUD, Condo, or Co-op (12/14/2016) ..178 Chapter B-3, Flood Insurance Requirements ..183B-3-01, Flood Insurance Requirements Applicable to All Property Types (12/12/2018) ..183 Chapter B-4, Additional or Optional Insurance Coverage..186B-4-01, Earthquake or Typhoon Insurance (11/12/2014) ..186B-4-02, Builder s Risk/Construction Site Insurance (11/12/2014) ..187B-4-03, Mortgage Loan or Credit Life Insurance (11/12/2014) ..187 Chapter B-5, Property and Flood Insurance Loss Events and Claim Settlements ..188B-5-01, Insured Loss Events (04/10/2019).

10 188B-5-02, Uninsured Loss Events (12/13/2017) ..194 Chapter B-6, Lender-Placed Insurance..196B-6-01, Lender-Placed Insurance Requirements (10/14/2015)..196 Chapter B-7, Liability and Fidelity/Crime Insurance Requirements for Project Developments..199B-7-01, Liability Insurance Requirements for Project Developments (09/18/2018)..199B-7-02, Fidelity/Crime Insurance Requirements for Project Developments (09/18/2018)..200 Chapter B-8, Mortgage Insurance..201 Section , Conventional Mortgage Insurance Requirements .. , Conventional Mortgage Insurance Servicer Responsibilities (11/12/2014) .. , Paying Conventional Mortgage Insurance Premiums (05/20/2015).. , Replacing Conventional Mortgage Insurance Policies (11/12/2014) .. , Termination of Conventional Mortgage Insurance (12/12/2018) ..204 Section , FHA Mortgage Insurance Requirements .. , FHA Mortgage Insurance Coverage Requirements (05/10/2017).