Selling Guide

Published October 2, 2018

A2-5.1-02: Ownership and Retention of Loan Files and Records (12/19/2017)

This topic contains information on individual mortgage loan files, including:

  • Ownership of the Loan File

  • General Requirements for Records

  • Records Retention Requirements

Ownership of the Loan File

All records related to loans (including all data and materials representing, based on, or compiled from such records) sold to or serviced for Fannie Mae are Fannie Mae’s property and any other owner of a participation interest in the loan regardless of their physical form or characteristics or whether they are developed or originated by the loan seller, servicer, or others.

Each of the loan originator, seller, servicer, and any service bureau or any other party providing services in connection with selling or servicing a Fannie Mae loan:

  • has no right to possess these documents and records except under the conditions specified by Fannie Mae, and

  • must hold these documents solely for the benefit of Fannie Mae.

The servicer must use the loan origination file to accumulate other pertinent servicing and liquidation information.

If the seller does not service the loan, it must transfer the loan file to the servicer. The servicer must document in the servicing loan file its compliance with all Fannie Mae policies and procedures, including timelines that are required by the Servicing Guide. The servicer and the responsible party must keep all of the individual loan records and all servicing records for the time it serviced the loan.

General Requirements for Records

The seller/servicer must:

  • maintain the accounting records relating to loans in accordance with sound and generally accepted accounting principles;

  • ensure that the records meet Fannie Mae’s requirements;

  • ensure the accuracy, security, confidentiality, integrity, completeness and legibility of the individual loan file;

  • protect against any anticipated threats or hazards to the security or integrity of files and records;

  • protect against unauthorized access to or use of files and records and is responsible for requiring, by contract, that any subservicers or other third parties that access mortgage files and records also implement these measures;

  • periodically review changes in technology to make sure that all records continue to be obtainable and readable in the future.

The following table describes Fannie Mae’s general rights related to it audit of records.

GENERAL REQUIREMENTS FOR AUDITS OF RECORDS
Topic Description
Right to Audit Fannie Mae may examine and audit, at any reasonable time, all loan records and other information that Fannie Mae considers necessary to ensure that the seller/servicer is complying with Fannie Mae requirements.
Delivery of Records
  • When Fannie Mae sends a written request to a seller/servicer to examine mortgage records, the seller/servicer must deliver all records to Fannie Mae or to whomever Fannie Mae designates within the time frame specified by Fannie Mae.

  • Fannie Mae will not execute any trust receipts for documents it requests and will not pay for their delivery. If the seller/servicer is retaining any of the records in a format other than paper, the seller/servicer must reproduce them at it own expense.

  • If Fannie Mae has only a participation interest in a loan, Fannie Mae will provide proof of its ownership interest upon request.

  • If the seller/servicer is unable to respond to Fannie Mae’s request to produce records in a timely manner, the seller/servicer must provide a reasonable explanation for its failure to produce the records and, if appropriate, offer evidence that it has satisfied any requirement about which Fannie Mae is concerned.

  • The seller/servicer is responsible for all Fannie Mae Losses incurred by Fannie Mae in enforcing its right of access to the records, unless it is determined that Fannie Mae had no legal right of access.

Audit Activities Fannie Mae’s examination and audit of the seller/servicer’s records may consist of
  • monitoring all monthly accounting reports submitted to Fannie Mae;

  • conducting periodic procedural reviews during visits to the seller/servicer’s office or the document custodian’s place of business;

  • conducting in-depth audits of the seller/servicer’s internal records and operating procedures; and

  • performing spot-check reviews of loans in the seller/servicer’s portfolio on a random sample basis.

Record Retention Requirements

The following table describes the record retention requirements for certain types of records.

RECORD RETENTION REQUIREMENTS
Type of Record Requirements
Loan payment records The servicer must maintain permanent mortgage account records for each loan it services for Fannie Mae. The records must be identified by Fannie Mae’s loan number (and any related participation certificate or MBS pool number) in addition to any other identification the servicer uses. The servicer may develop its own system for maintaining these records, as long as it can produce an account transcript within a reasonable time after it is requested.

The servicer’s accounting system must be able to produce detailed information for the following:

  • all transactions that affect the loan balance,

  • the financial status of the loan, and

  • any overdrafts in the escrow account.

Accounting reports Unless instructed otherwise, the servicer may destroy any accounting reports 18 months after such reports are filed with Fannie Mae.
Annual Statement of Eligibility for Document Custodians (Form 2001) A servicer that is also a Fannie Mae document custodian must maintain a copy of Form 2001 for seven years at all locations that are covered by the completed form and ensure that they are available for on-site reviews.
Records related to HAMP The servicer must retain:
  • all documents and information evidencing the complete evaluation of a borrower for HAMP for seven years after document collection or four years after loan liquidation, whichever is later; and

  • all data, books, reports, documents, audit logs, and records, related to HAMP, and a copy of all computer systems and application software necessary to review and analyze any electronic records for at least four years, or for such longer period as may be required by applicable law.

Records related to 2MP The servicer must retain:
  • all documents and information evidencing compliance with our requirements when evaluating a borrower for 2MP, for seven years after document collection or for four years after loan liquidation, whichever is later;

  • all documents and information related to the monthly payments during and after any trial period, as well as incentive payment calculation and such other required documents; and

  • detailed records to document the reason(s) for any trial loan modification failure.

Records related to bankruptcy or foreclosure proceedings
  • The servicer must retain all of the documents required to be included in the individual loan file and must ensure that they are readily accessible if needed in any bankruptcy or foreclosure proceeding, or for any other purpose in connection with the servicing of the loan.

  • The servicer may hold copies if originals are not required, while originals have been sent for filing but have not yet been returned, or while the originals are otherwise temporarily out of the seller/servicer’s possession.

Expense reimbursement claims The servicer must retain in the loan servicing file all supporting documentation for all requests for expense reimbursement.
Liquidation records After a loan is liquidated, the servicer must keep the individual loan records for at least four years, unless the local jurisdiction requires longer retention or Fannie Mae specifies that the records must be retained for a longer period.
Records related to repurchase or reimbursement If a loan or property is repurchased or a make whole payment remitted, the responsible party must keep the individual loan records for at least four years from loan liquidation unless applicable law requires longer retention or Fannie Mae specifies that the records must be retained for a longer period.

Note: The time frame from loan liquidation is measured from the date of the loan payoff or the date that any applicable claim proceeds are received, whichever is later.

For eMortgages, the seller/servicer must follow the record retention requirements for the type of record described in the table immediately above, if applicable, and the requirements for storing mortgage loan files and records as described in A2-5.1-03, Electronic Records, Signatures, and Transactions

Related Announcements

The table below provides references to the Announcements that have been issued that are related to this topic.

Announcement Issue Date
Announcement SEL-2017-10 December 19, 2017
Announcement SEL-2017-05 May 30, 2017
Announcement SEL-2015–09 August 25, 2015
Announcement SEL-2015–07 June 30, 2015
Announcement SEL-2012–13 November 13, 2012
Announcement SEL-2011–04 May 24, 2011
Announcement SEL-2010–10 August 12, 2010
Announcement 09-19 June 8, 2009