Servicing Guide

Published September 18, 2018

  • Servicing Guide: Main Page
    • Part D: Providing Solutions to a Borrower
      • D2: Assisting a Borrower Who is Facing Default or in Default
        • D2-3: Fannie Mae’s Home Retention and Liquidation Workout Options
          • D2-3.4: Other Workout Options to Assist a Borrower
            • D2-3.4-02: Offering a Mortgage Release (Deed-in-Lieu of Foreclosure) for a Second Lien Mortgage Loan (11/12/2014)

D2-3.4-02: Offering a Mortgage Release (Deed-in-Lieu of Foreclosure) for a Second Lien Mortgage Loan (11/12/2014)

This topic contains information on offering a mortgage release (deed-in-lieu of foreclosure) for a second lien mortgage loan.

The following table provides the requirements for the servicer of a seriously delinquent second lien mortgage loan when evaluating a borrower for a Mortgage Release.

The servicer must...

Coordinate with the first lien mortgage loan servicer regarding any proposed action related to the acceptance of a Mortgage Release to determine the following:

  • status of the first lien mortgage loan,

  • intentions of the first lien mortgage loan servicer, and

  • possibility of a mutually arranged disposition.

Order an Owner and Encumbrance Report to ensure that there are no other outstanding liens.

The servicer must obtain Fannie Mae’s prior approval to accept a Mortgage Release. The servicer must follow the procedures in Requesting Approval for a Mortgage Release for a Second Lien Mortgage Loan in F-1-27, Requesting Fannie Mae’s Approval via Fannie Mae’s Servicing Solutions System for requesting Fannie Mae’s approval of a Mortgage Release.