General Requirements for Completing All Conveyance Documents

The following table outlines the required servicer actions for completing conveyance documents.

The servicer must...

Satisfy the requirements that FHA, HUD, VA, RD, or the mortgage insurer have established regarding conveyance of an acquired property to them and for completing the actual conveyance within the required time frame.

Establish procedures to ensure that all post-foreclosure sale actions are taken in a timely manner, particularly in those states (such as Maryland) that require significant post-sale actions to obtain good and marketable title.

Note: Fannie Mae will hold the servicer responsible for a failure to obtain good and marketable title in a timely manner (even when the foreclosure sale was held within Fannie Mae's prescribed time frame).

Use the type of deed or other transfer instrument that is customarily used to convey a property in the jurisdiction where the security property is located.

Instruct the law firm to include in the conveyance document(s) the

  • street address,

  • unit number (when applicable), and

  • legal description.

Resume managing the eliminated/rescinded file pursuant to the Servicing Guide.

Retain in its individual mortgage loan file the foreclosure deed and Mortgage Release documents and any and all material that could assist Fannie Mae in marketing, selling, or conveying the property.

If Fannie Mae discovers during the marketing of an acquired property that additional information is needed, it will contact the servicer by telephone or email. The servicer must provide all requested additional information within three business days of the request. See A2-1-03, Execution of Legal Documents for additional information regarding the execution of legal documents. The servicer must follow the procedures in F-1-10, Obtaining and Executing Legal Documents. See also E-3.1-03, Fannie Mae Address for Instruments of Record

When Foreclosure Is Conducted in Fannie Mae's Name

When the foreclosure is conducted in Fannie Mae's name, no conveyance document is required unless the mortgage insurer or guarantor has indicated it will accept conveyance of the property.

The following table outlines the required servicer actions when the foreclosure is conducted in Fannie Mae's name and the mortgage insurer or guarantor indicates it will accept conveyance of the property.

If the servicer... Then the servicer must...

has Fannie Mae's LPOA to execute conveyance documents

prepare, execute, and submit for recordation a special or limited warranty deed conveying title to the property to the insurer or guarantor.

does not have Fannie Mae's LPOA or is otherwise unable to convey the title directly to the insurer or guarantor

prepare the necessary documents to convey the property to the insurer or guarantor and submit them to Fannie Mae's CPM division (see F-4-03, List of Contacts) for execution. This must be completed at least two weeks before title to the property will be turned over to the insurer or guarantor. Fannie Mae will return the documents to the servicer as soon as they are executed.

When Foreclosure Is Conducted in the Servicer's Name

If the servicer knows that a property can be conveyed directly to FHA or the VA, and that it is allowed to directly convey the title to them, it must do so.

In the following circumstances, the servicer is responsible for the marketing and disposition of the acquired property and title to the property must remain in the servicer's name for

  • an FHA coinsured mortgage loan,

  • a modified special servicing option or a regular servicing option RD mortgage loan, or

  • any regular servicing option MBS mortgage loan.

When the foreclosure is conducted in the servicer's name, the servicer must convey title to the property to Fannie Mae after the servicer is the successful bidder at the foreclosure sale, and the mortgage loan is one of the following:

  • a conventional mortgage loan held in Fannie Mae's portfolio,

  • a conventional mortgage loan in a special servicing option MBS pool,

  • a special servicing option RD mortgage loan, or

  • an FHA or VA mortgage loan that cannot be conveyed.

When the servicer is required to convey title to the property to Fannie Mae after the property is acquired, the law firm must have the title vested in Fannie Mae's name in a manner that will not result in the imposition of a transfer tax.

The servicer must submit any deed for recordation that conveys title to Fannie Mae on the day following the foreclosure sale. Should the mortgage insurer or guarantor decide to accept conveyance of the property after title has been conveyed to Fannie Mae, the servicer must proceed as described in When Foreclosure Is Conducted in Fannie Mae’s Name in E-4.2-01, Completing Conveyance Documents.

Conveying Insured Conventional Mortgage Loans

The conventional mortgage insurer decides whether it will accept conveyance of a property that secured a conventional mortgage loan only after the claim has been filed. Therefore, the property cannot be conveyed until the mortgage insurer provides notice of its decision.

Whenever the mortgage insurer agrees to accept the property, the servicer must immediately convey it.

Conveying FHA Mortgage Loans

The servicer can convey a property that secured an FHA mortgage loan as soon as Fannie Mae has acquired marketable title. The servicer must not convey a property that secured an FHA coinsured mortgage loan under any circumstances.

Conveying VA Mortgage Loans

The servicer must convey a property that secured a VA mortgage loan to the VA when it sends the "notice of election to convey" within 15 days after the foreclosure sale date. The servicer must also send a preliminary billing for VA's "upset price."