Servicing Guide Updates to Conform to the FHFA Directive on Harmonized Contracts

Servicing Guide Updates to Conform to the FHFA Directive on Harmonized Contracts

On October 3, 2012, Fannie Mae updated our servicing guide. The changes in this update will take effect on January 1, 2013, unless stated otherwise. Contained in the announcement are new and clarified policies related to the following:

• Specific changes to Fannie Mae’s quality control process concerning our lender selling representation and warranties framework, which is delineated in Selling Guide Announcement SEL-2012-08 dated September 11, 2012. This framework outlines a lender’s responsibilities for underwriting and delivering quality loans to Fannie Mae and addresses specific policies concerning when lenders will be required to buy back a loan which is determined to be ineligible for purchase by Fannie Mae.
• Required servicer response timeframes and the appeals process available to servicers for when Fannie Mae’s requests that a loan be repurchased out of an MBS due to the quality control process determining that a mortgage loan failed to meet underwriting requirements or is otherwise ineligible for purchase.  For example, Fannie Mae reserves the right to require the servicer to repurchase a  loan if the title defect was the result of a servicer error and is not resolved to Fannie Mae’s satisfaction within 90 days of the servicer’s receipt of notice of the servicing title defect from Fannie Mae (or otherwise).
• Performance metrics used to analyze servicer performance related to performing and non-performing loans.
• Fannie Mae’s rights in the event that a seller/servicer does not perform in full compliance with the seller/servicer contract.
• Compensatory fees that servicers will incur in the event of late or inaccurate loan reporting, incorrect MBS security reporting, liquidation processing delays, improper conduct in foreclosure proceedings and other eventualities.  Servicers’ responsibilities to Fannie Mae in the event that a title defect is identified with a loan.
• Policies related to servicer termination of a servicer’s servicing of mortgage loans.

These new and clarified policies are available in Fannie Mae's Servicing Guide Announcement SVC-2012-21 dated October 3, 2012.

Additional Materials

• For FHFA's announcement please access FHFA's website
• For Fannie Mae's Lender Letter, please access Lender Letter

Investors may contact Fannie Mae's Fixed-Income Securities Marketing Help Line at 1-800-237-8627 with any questions.

Originally published: 10/03/12