Servicing Guide

Published December 12, 2018

E-1.1-02: Required Referral Documents (11/12/2014)

The servicer must provide all appropriate documentation and mortgage loan status data for each mortgage loan it refers to a law firm for any default-related legal services.

After referral, the servicer must keep the law firm informed about any change in the status of the mortgage loan.

At the time of any referral to a law firm, the servicer must provide the law firm with

  • a true, correct, and complete copy of the note, including any allonge, produced from the original held by the document custodian;

  • the original note, including any allonge; or

  • a lost note affidavit.

Providing a copy of or the original note will depend on whether the applicable law of the jurisdiction requires the original note or merely a copy. Lost note affidavits must only be used after a thorough and diligent search has been made for the original note. Fannie Mae does not reimburse the servicer for the cost to obtain original notes or lost note affidavits.

The servicer must institute a process to request the necessary documents from the document custodian no later than the 95th day of delinquency in order to ensure that these documents are available at the time of referral.

If the servicer fails to provide the appropriate documentation and information as part of the referral package, or does not respond within three business days to requests from the law firm for additional information or documents, Fannie Mae reserves the right to pursue any of its available remedies, which may include, but are not limited to, the following:

  • indemnification,

  • “make whole,”

  • repurchase, or

  • compensatory fees.

This topic contains the following:

Additional Required Bankruptcy Referral Documents

The following table lists the documentation required specifically for bankruptcy referral packages.

Documentation required for the bankruptcy referral package

All legal documents the law firm needs to conduct the bankruptcy proceedings.

All necessary information about the status of

  • the property,

  • the borrower,

  • the mortgage loan, and

  • the bankruptcy filing.

Any relevant information on the current and any prior bankruptcy filings, such as plans, pleadings, schedules, and proofs of claims involving the borrower or the subject property.

Information related to any potential workout options.

The mortgage loan collection history.

Any current or previous foreclosure status information.

All information the servicer has regarding the value of the security property, if applicable.

The servicer must check its records for the mortgage loan carefully to determine whether the borrower has filed for bankruptcy previously. If the records reflect other bankruptcy filings, the servicer must mark the referral package it sends to the bankruptcy attorney as “repeat filer” or “possible bankruptcy abuse” and ask the attorney to confirm whether the borrower’s filing is considered “abusive.” See also E-2.3-01, Identifying Abusive Filers for additional information.

Additional Required Foreclosure Referral Documents

When an assignment of mortgage to the party in whose name the foreclosure will be conducted is required (and in all cases as to which MERS is the mortgagee of record), the servicer must adhere to the requirements shown in the following table.

The servicer must...

Have a process to identify the mortgagee of record by the 90th day of delinquency.

Ensure that, no later than the time of the foreclosure referral to a law firm, the mortgage has been validly assigned (that is, is legally effective and enforceable) to the party in whose name the foreclosure will be conducted.

The following table provides additional requirements for the assignment of mortgages.

If... Then the servicer...

the property is located in a jurisdiction that recognizes the effectiveness of executed, but unrecorded, assignments

may initiate foreclosure prior to recordation of the assignment.

However, the assignment must be recorded as soon as possible, in compliance with the laws of the jurisdiction where the property is located.

the jurisdiction requires recordation of the assignment to the party in whose name the foreclosure will be conducted before proceeding with foreclosure

must record the assignment before the foreclosure begins (as defined by applicable state or local law).

the MERS is the mortgagee of record

must as quickly as possible prepare and execute (and record, if necessary) the assignment of mortgage from MERS to the party in whose name the foreclosure will be conducted.

the assignment of the mortgage has been executed but not recorded or sent for recording as of the date of the foreclosure referral

must include the original assignment in the referral package sent to the law firm.

applicable law requires that there be an assignment of mortgage to the servicer or Fannie Mae before foreclosure referral, e.g., prior to the sending of a notice of default or right to cure

must prepare and execute (and record, if necessary) the assignment of mortgage in compliance with applicable requirements.

Additional Documents Required for Proceedings Involving a Manufactured Home

If the referral is for a mortgage loan secured by a manufactured home, the servicer must also provide the law firm with

  • information that the property type is manufactured housing;

  • copies (or originals, if originals will be needed) of all collateral documents or other documents that may facilitate the legal process; and

  • a copy of the property inspection report, property status report, or other documentation that identifies the status of the property as manufactured housing.