When determining the servicer’s compliance with Fannie Mae’s time frames for completing foreclosure, adjustments are made for allowable delays. Allowable delays and the applicable number of days permitted for each delay are shown in the Foreclosure Time Frames and Compensatory Fee Allowable Delays Exhibit. See also E-3.2-15, Allowable Time Frames for Completing Foreclosure.
Delays due to urgent or unforeseeable circumstances or for situations in which applicable law necessitates additional time may also be considered; however, such circumstances should be rare.
Compensatory fees will be applied based on the UPB of the mortgage loan, the applicable PTR, the length of the delay, and any additional costs that are directly attributable to the delay. Fannie Mae assesses the servicer’s foreclosure time frame performance at the state level and on a monthly basis at the mortgage loan level using the process in the following table.
|Step||Calculating Compensatory Fees|
a. Calculate the number of days the servicer took to complete the foreclosure process, from the LPI date through the foreclosure sale date.
b. Determine whether the days are fewer than the allowable time frame (”under standard”) or in excess of the allowable time frame (”over-standard”).
The compensatory fee or ”credit” for each mortgage loan will be calculated using
Apply any ”credit” if applicable, to offset any compensatory fees that the servicer has incurred for over-standard performance at the state level and within the billing month.
If the servicer’s performance is under-standard for the state being evaluated, the servicer will not have a compensatory fee for that state.
Note: The servicer must not apply the remaining ”credit” toward any compensatory fee resulting from over-standard performance in another state.
Note: Any under-standard ”credits” may not be applied to compensatory fee invoices in subsequent months for the same or a different state.
If the servicer’s performance is over-standard for the state being evaluated, the servicer may be assessed compensatory fees for that state.
Note: State-level balances are summarized and the servicer will be billed accordingly each month.
See F-2-03, Compensatory Fee Calculation Examples for examples that illustrate how compensatory fees are calculated.
If the servicer chooses to appeal a compensatory fee in connection with a delay that is outside of the servicer’s control, the servicer must submit an appeal with all relevant supporting documentation to Fannie Mae via the Fannie Mae File Transfer Portal. The servicer must summarize and submit to Fannie Mae all supporting documentation for all uncontrollable delays for which an adjustment is being requested at the initial submission of the appeal. Additional delays claimed in subsequent appeals will not be considered. Supporting documents may include, but are not limited to
servicing notes, or
Fannie Mae includes a template for appeals and detailed instructions of the process for appealing compensatory fees with the compensatory fee invoice. The servicer may appeal compensatory fee assessments for both over-standard and under-standard performance. The servicer may request recalculation of compensatory fees in instances where data that was initially reported to Fannie Mae was incorrect.
The following table provides references to Announcements that are related to this topic.