Servicing Guide

Published June 13, 2018

D2-3.4-03: Assignment of a Mortgage Loan to the Insurer or Guarantor (11/12/2014)

This topic contains the following:

Assignment of a Conventional Mortgage Loan to the Mortgage Insurer

If the mortgage insurer exercises a right under the master policy to acquire a delinquent conventional first lien mortgage loan, the servicer must assign the mortgage loan to the mortgage insurer and take whatever action is necessary to obtain payment under the insurance policy.

If the mortgage insurer instructs the servicer to assign an insured delinquent second lien conventional mortgage loan to it rather than continuing the foreclosure process, the servicer must prepare the necessary legal documents to assign the second lien mortgage loan and file a claim under the insurance contract.

See the Investor Reporting Manual for reporting the assignment to Fannie Mae.

Assignment of a HUD or VA Mortgage Loan to the Insurer or Guarantor

If the mortgage insurer or guarantor exercises its right under the policy to acquire a delinquent government mortgage loan or an assignment is the only way to liquidate a mortgage loan, the servicer must

  • assign the mortgage loan to the insurer or guarantor and take required follow-up actions in compliance with applicable regulations and procedures,

  • file a claim with the insurer or guarantor, and

  • report the assignment to Fannie Mae. See the Investor Reporting Manual for reporting the assignment to Fannie Mae.

Fannie Mae will hold the servicer accountable for any loss Fannie Mae incurs because it failed to assign a VA-guaranteed mortgage loan for refunding when the VA instructed it to do so.