Selling Guide

Published October 2, 2019

C2-1.3-01: Servicing Execution Tool and Servicing Marketplace (10/31/2017)

This topic describes the process for concurrent sale of servicing using the Servicing Execution Tool (SET) and Servicing Marketplace component of Fannie Mae’s whole loan committing application, including:

Concurrent Sale of Servicing

Lenders may retain, release, or sell the servicing rights associated with the loans they deliver to Fannie Mae. Lenders may execute a concurrent transfer of servicing via Fannie Mae’s whole loan committing application with either a best efforts or a mandatory commitment. By electing and being approved to participate in the servicing-released component of the whole loan committing application, known as Servicing Execution Tool (SET) or Servicing Marketplace, lenders may arrange for a concurrent sale of the servicing to an approved Fannie Mae servicer. See A3-3-02, Concurrent Servicing Transfers, for approval requirements and additional information.

All transfers of servicing using SET must comply with this Guide, the Servicing Execution Tool — Mortgage Loan Servicing Purchase and Sale Agreement, and all applicable laws. The procedures and documentation required for a transfer of servicing are set out in the Servicing Execution Tool Servicing Transfer Instructions (available on Fannie Mae’s website).

All transfers of servicing using Servicing Marketplace must comply with this Guide, and all applicable laws. The procedures and documentation required for a transfer of servicing are set out in the servicing transfer instructions available directly from the associated Servicing Marketplace transferee servicer.

A lender's rights and obligations related to a committed loan for which the lender has sold the servicing are as set forth in the Mortgage Selling and Servicing Contract and the Selling and Servicing Guides, and use of the whole loan committing application in no way alters a lender's obligations to Fannie Mae with respect to such loans.

Relationship Between Lenders and Servicers

Lenders and servicers using SET must enter into the non-negotiable Servicing Execution Tool — Mortgage Loan Servicing Purchase and Sale Agreement, the terms of which govern all sales of servicing rights between lenders and servicers using SET. See E-2-07, Servicing Execution Tool — Mortgage Loan Servicing Purchase and Sale Agreement.

SET Funding

If the lender accepts Fannie Mae's price on a loan and the servicer's price on the associated servicing under SET and subsequently sells the loan to Fannie Mae, Fannie Mae will facilitate the sale of the related servicing by:

  • calculating the net funding servicing-released premium (SRP) (see definition below);

  • collecting an amount equal to the net funding SRP from the servicer; and

  • remitting an amount equal to the net funding SRP to the lender on behalf of the servicer, together with the acquisition price.

The “net funding SRP” is based on the servicer's net SRP for that loan (which takes into account price adjustments and fees agreed to between the lender and the servicer in the Servicing Execution Tool — Mortgage Loan Servicing Purchase and Sale Agreement but not the escrows) as well as the final amount of escrow funds entered into the whole loan committing application by the lender.

No Recourse to Fannie Mae

Fannie Mae's calculation of the net SRP and the net funding SRP is based on unpaid principal balance, escrow funds, and other loan information submitted by the lender through the whole loan committing application, and information submitted by the servicer through SET. Fannie Mae accepts no responsibility for the accuracy or completeness of such information and is entitled to rely on such information in calculating the net SRP and the net funding SRP and in collecting an amount equal to the net funding SRP from the servicer and remitting it to the lender on behalf of the servicer (or in deducting an amount equal to any negative net funding SRP from the acquisition proceeds and remitting it to the active servicer). Lenders will have no recourse to Fannie Mae if issues arise with any of the following:

  • the accuracy or completeness of the information that the whole loan committing application uses to calculate the net SRP or the net funding SRP;

  • the accuracy and completeness of any information that the lender obtains from the whole loan committing application and uses or relies upon in any way;

  • the lender's sale (or attempted sale) of servicing to the servicer (other than the calculation, collection, and remittance of the net funding SRP and transfer of certain data to the servicer); or

  • the servicing obligations and obligations relating to escrow funds.

Number of Servicers in SET and Servicing Marketplace

Fannie Mae may increase or decrease the number of servicers that participate in SET or Servicing Marketplace at any time.

Related Announcements

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

Announcements Issue Date
Announcement SEL-2017-09 October 31, 2017
Announcement SEL-2015–03 March 31, 2015
Announcement SEL-2014–16 December 16, 2014
Announcement SEL-2011–11 October 25, 2011