Selling Guide

Published October 2, 2018

A3-3-04: Document Custodians (04/03/2018)

This topic provides general information on document custodians, including:

General Requirements

Certain documents related to Fannie Mae loans must be held by a Fannie Mae-approved document custodian, which may be any of the following:

  • Fannie Mae's designated document custodian (DDC),

  • a full-service certification custodian (FCC), or

  • another approved custodian institution that meets the requirements in the Fannie Mae Requirements for Document Custodians guide (RDC guide).

The document custodian is acting on behalf of the seller/servicer and Fannie Mae when certifying loan documents and data at the time of acquisition by Fannie Mae. The roles and responsibilities of the document custodian are described in the RDC guide.

Selection of a Document Custodian

For whole loans and other loans held in Fannie Mae's portfolio (excluding eNotes), the seller/servicer must use Fannie Mae's DDC or FCC as the document custodian. Other loans held in Fannie Mae's portfolio includes As Soon As Pooled Plus (ASAP Plus) loans and ASAP Plus loans redelivered into MBS pools.

For MBS loans (excluding eNotes), the seller/servicer must select a Fannie Mae-approved document custodian (including the DDC or FCC).

For whole loans or MBS loans delivered as eNotes, Fannie Mae is the document custodian but has designated certain third parties to certify eNotes. The seller/servicer must use an approved third party to certify eNotes to Fannie Mae.

Fannie Mae may require a seller/servicer or document custodian to transfer documents to a different document custodian, which may be the DDC, FCC, or another eligible document custodian, even if the current custodian satisfies Fannie Mae's requirements.

Documentation of the Relationship

The seller must add the document custodian to its profile within the Loan Delivery application. For all mortgage loans, the document custodian will certify the loans through the Document Certification application.

Each custodian arrangement must be evidenced by the execution of one of the following agreements:

Type of Agreement Requirements
Master Custodial Agreement (Form 2003)
  • For custodian arrangements with all document custodians other than the DDC or FCC.

  • Covers custodian arrangements for MBS loans.

  • Seller/servicer sends Form 2003 executed by the lender and the custodian to Fannie Mae’s Custodian Oversight and Monitoring Operations (see E-1-03, List of Contacts). Fannie Mae will execute the document and send copies of the fully executed Form 2003 to the seller/servicer and custodian.

Designated Custodian Master Custodial Agreement (Form 2010)
  • For custodian arrangements with Fannie Mae’s DDC.

  • Covers custodial arrangements for both portfolio loans and MBS loans.

  • Seller/servicer sends the completed Form 2010 to the DDC for execution. See E-1-03, List of Contacts

  • Upon receipt of the executed Form 2010 from the seller/servicer, the DDC will send the seller/servicer ancillary documentation for completion. After the documentation and onboarding are complete, Fannie Mae and the DDC will execute Form 2010. A copy of the fully executed Form 2010 will be returned to the seller/servicer for its records.

Master Custodial Agreement (Form 2017)
  • For custodian arrangements with Fannie Mae’s FCC.

  • Covers custodial arrangements for both portfolio loans and MBS loans.

  • Seller/servicer sends the completed Form 2017 to the FCC for execution.

  • Upon receipt of the completed Form 2017 from the seller/servicer, the FCC will send the seller/servicer ancillary documentation for completion. After the documentation and onboarding are complete, Fannie Mae and the FCC will execute Form 2017. A copy of the fully executed Form 2017 will be returned to the seller/servicer for its records.

Additional Seller/Servicer Obligations Related to Document Custodians

The following table contains additional seller/servicer responsibilities regarding document custodians.

Topic Description
General Responsibilities The seller/servicer is responsible for the safekeeping of Fannie Mae custody documents and for all losses incurred by Fannie Mae because the document custodian it selected failed to perform its fiduciary responsibilities. Fannie Mae may also require the document custodian to make Fannie Mae whole if the document custodian breaches its fiduciary obligations to Fannie Mae.
Seller/Servicer’s Compensation of the Document Custodian The seller/servicer must pay all fees and charges of the document custodian (including the DDC and FCC). Fannie Mae is under no obligation to pay compensation to the document custodian.

Upon certification of each file delivered to a document custodian, the document custodian will bill the servicer unless the seller and servicer specify a different responsible party. Fannie Mae will look to the servicer as the responsible party if payment has not been remitted to the document custodian for services it has provided.
Monitoring

A seller/servicer must establish appropriate methods for monitoring the financial viability and operational capabilities of any document custodian it uses, which include, at a minimum:

  • an annual review of information about the document custodian’s internal audits, and

  • a quarterly review of the document custodian’s financial rating (or its parent’s or subsidiary’s ratings if the custodian is not a regulated institution).

Should the financial rating fall below the minimum criteria, the seller or servicer must immediately notify their Fannie Mae Servicing Consultant and send an email notification to Fannie Mae's Custodian Oversight and Monitoring department (see E-1-03, List of Contacts). Fannie Mae will determine whether it will allow the documents to remain with the current document custodian or require them to be transferred to an acceptable document custodian.

Providing Loan Information The servicer must provide to the document custodian an electronic list that identifies, by Fannie Mae loan number, the loans serviced by the servicer for which the document custodian holds custodial documents within 30 days of such a request from the document custodian.

Related Announcements

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

Announcement Issue Date
Announcement SEL-2018-03 April 03, 2018
Announcement SEL-2017–06 July 25, 2017
Announcement SEL-2016–02 February 23, 2016
Announcement SEL-2015–13 December 15, 2015
Announcement SEL-2014–11 August 26, 2014
Announcement SEL-2013–03 April 9, 2013
Announcement SEL-2012–13 November 13, 2012
Announcement SEL-2012–10 October 2, 2012
Announcement SEL-2011–01 January 27, 2011
Announcement SEL-2010–10 August 12, 2010
Announcement 08–37 December 19, 2008
Announcement 08–32 December 10, 2008