Servicing Guide

Published September 18, 2018

D1-4.1-04: Transfers of Ownership by Grant Deed (11/12/2014)

This topic contains information on transfers of ownership by grant deed.

The servicer must not consent to any transfer of ownership by a grant deed involving a party that indicates its services will relieve the borrower of his or her mortgage loan debt. The following table lists the servicer’s responsibilities if it learns that the borrower has been contacted by such a party proposing the execution of a grant deed.

The servicer must...

Explain to the borrower that the transfer of ownership will not be acknowledged, that the borrower will not be relieved of the mortgage obligation, and that foreclosure proceedings may be initiated if the property is transferred.

Work with a borrower who has experienced a hardship to determine whether any workout options are appropriate. See D2-3, Fannie Mae’s Home Retention and Liquidation Workout Options for additional information.

The servicer must contact its Fannie Mae Servicing Representative (see F-4-03, List of Contacts) if it is contacted by a party about accepting a short payoff for a property that it obtained through the borrower’s execution of a grant deed. Under no circumstances should the servicer negotiate the short payoff. Fannie Mae generally will advise the servicer either to accept a Mortgage Release or to initiate foreclosure proceedings.

The servicer must follow the procedures in Responding to a Title Transferred via Grant Deed in F-1-20, Processing a Transfer of Ownership for transfers of ownership by a grant deed.