Servicing Guide

Published December 12, 2018

A2-1-03: Execution of Legal Documents (11/12/2014)

The servicer ordinarily appears in the land records as the mortgagee to facilitate performance of the servicer’s contractual responsibilities, including, but not limited to, the receipt of legal notices that may impact Fannie Mae’s lien, such as notices of foreclosure, tax, and other liens. However, Fannie Mae may take any and all action with respect to the mortgage loan it deems necessary to protect its or an MBS trust’s ownership of the mortgage loan, including recording an assignment of mortgage, or its legal equivalent, from the servicer to Fannie Mae or its designee. In the event that Fannie Mae determines it necessary to record such an instrument, the servicer must assist Fannie Mae by

  • preparing and recording any required documentation, such as assignments of mortgages, powers of attorney, or affidavits; and

  • providing recordation information for the affected mortgage loans.

The servicer must follow the procedures in F-1-12, Obtaining and Executing Legal Documents when sending documents for Fannie Mae’s execution.

The servicer is authorized to execute legal documents related to payoffs, foreclosures, releases of liability, releases of security, mortgage loan modifications, subordinations, assignments of mortgages, and conveyances (or reconveyances) for any mortgage loan for which it (or MERS®) is the owner of record. When an instrument of record requires the use of an address for Fannie Mae, including assignments of mortgages, foreclosure deeds, REO deeds, and lien releases, the servicer must follow the procedures in Fannie Mae Contacts for Document Execution Requests in F-1-12, Obtaining and Executing Legal Documents to locate the appropriate address.

This topic contains the following:

Fannie Mae’s Limited Power of Attorney to Execute Documents

When Fannie Mae is the owner of record for a mortgage loan, it permits the servicer that has Fannie Mae’s LPOA to execute certain types of legal documents on Fannie Mae’s behalf. The servicer must have an LPOA in place to be authorized to execute the following legal documents on behalf of Fannie Mae:

  • full satisfaction or release of a mortgage or the request to a trustee for a full reconveyance of a deed of trust;

  • partial release or discharge of a mortgage or the request to a trustee for a partial reconveyance or discharge of a deed of trust;

  • modification or extension of a mortgage or deed of trust;

  • subordination of the lien of a mortgage or deed of trust;

  • completion, termination, cancellation, or rescission of foreclosure relating to a mortgage or deed of trust, including, but not limited to, the following actions:

    • the appointment of a successor or substitute trustee under a deed of trust, in accordance with state law and the deed of trust;

    • the issuance or cancellation or rescission of notices of default;

    • the cancellation or rescission of notices of sale; and

    • the issuance of such other documents as may be necessary under the terms of the mortgage, deed of trust, or state law to expeditiously complete said transactions, including, but not limited to, assignments or endorsements of mortgages, deeds of trust, or promissory notes to convey title from Fannie Mae to the Attorney-in-Fact under this LPOA;

  • conveyance of properties to FHA, HUD, the VA, RD, or a state or private mortgage insurer; and

  • assignments or endorsements of mortgages, deeds of trust, or promissory notes to FHA, HUD, VA, RD, a state or private mortgage insurer, or MERS.

To request an LPOA, the servicer must follow the procedures in Requesting a Limited Power of Attorney in F-1-10, Obtaining and Executing Legal Documents.

If the servicer does not have an LPOA to execute documents on Fannie Mae’s behalf, or has a power of attorney that does not authorize it to execute documents for a specific type of transaction, the servicer must send the documents requiring execution in any instance in which Fannie Mae is the owner of record for the mortgage loan by email, when permitted. If, however, an original document must be executed by Fannie Mae, the servicer must send the document by regular or overnight mail. The servicer must follow the procedures in Fannie Mae Contacts for Document Execution Requests in F-1-10, Obtaining and Executing Legal Documents for instructions in sending documents to Fannie Mae.

Correcting Conveyances to Fannie Mae

The servicer must execute a quitclaim deed for properties that have been conveyed in error to Fannie Mae. The servicer must follow all procedures in F-1-10, Obtaining and Executing Legal Documents when preparing the reconveyance quitclaim deed. A quitclaim deed is an instrument of conveyance of real property that passes whatever title, claim, or interest that the grantor has in the property, but does not make any representations as to the validity of such title. A quitclaim deed is not a guarantee that the grantor has clear title to the property; rather it is a relinquishment of the grantor’s rights, if any, in the property. The holder of a quitclaim deed receives only the interest owned by the person conveying the deed.

Fannie Mae will execute the quitclaim deed only if the servicer has prepared the document to quitclaim or assign back to the previous grantor or assignor. The servicer must send the request for quitclaim deed execution to Fannie Mae as described in Submitting a Reconveyance Quitclaim Deed in F-1-10, Obtaining and Executing Legal Documents.