Filing an MI Claim Associated with a Short Sale or Third-Party Sale

For a mortgage loan liquidated via a short sale or third-party sale, the servicer must complete the actions listed in the following table in relation to the MI claim, in accordance with E-4.5-01, Filing MI Claims for Conventional Mortgage Loans or for Other Mortgage Loans for which Fannie Mae Bears the Risk of Loss.

The servicer must...

Remove the mortgage loan from Fannie Mae’s investor reporting system using Action Code 71.

Report the proceeds from the sale through the CRS, using the 357 receipt code for proceeds from a Short Sale and the 311 receipt code for proceeds from a Third-Party Sale.

File the MI claim within 30 days after remitting the applicable receipt code to Fannie Mae.

Provide the mortgage insurer with a copy of the following documents:

  • the final settlement statement,

  • the property valuation, and

  • the approval letter that states the terms and conditions of any short payoff.

Submit a final request for expense reimbursement through the CRS no later than 30 days following the settlement of the third-party sale or short sale.

Filing an MI Claim for a Property Acquired through a Mortgage Release or Foreclosure Sale

For properties acquired through a Mortgage Release or foreclosure sale, the servicer must complete the actions listed in the following table in relation to the MI claim, in accordance with E-4.5-01, Filing MI Claims for Conventional Mortgage Loans or for Other Mortgage Loans for which Fannie Mae Bears the Risk of Loss.

The servicer must...

Submit an REOgram within 24 hours of the property acquisition.

Remove the mortgage loan from Fannie Mae’s investor reporting system with Action Code 72.

File the MI claim within 30 days after the settlement of the Mortgage Release or the date of the foreclosure sale or, in states that have redemption periods after the foreclosure sale, within 30 days after the redemption period expiration.

Submit a final request for expense reimbursement through the CRS no later than 30 days following the settlement of the Mortgage Release or foreclosure sale date, or, in states that have redemption periods, within 30 days after expiration of the redemption period.

Provide the mortgage insurer with a copy of the valuation for an executed Mortgage Release.

Ensuring Timely Settlement of the MI Claim for a Conventional Mortgage Loan

After it files the claim, the servicer must follow up with the mortgage insurer to ensure that the claim is settled in a timely manner in accordance with E-4.5-01, Filing MI Claims for Conventional Mortgage Loans or for Other Mortgage Loans for which Fannie Mae Bears the Risk of Loss.

Generally, the mortgage insurer is contractually required to pay the claim within a specified period after it receives all required documentation. This period is usually 60 days.

If Fannie Mae does not receive the MI claim proceeds before the end of the contractual period, it will ask the servicer to explain the delay. The following table provides a list of data points the servicer must include in its explanation to Fannie Mae.

The servicer must include...

The date it met the mortgage insurer’s documentation requirements (if they had not been met with the servicer filed the claim).

The dates of its follow-up efforts with the mortgage insurer.

The mortgage insurer’s response(s) to the servicer’s inquiries.

If Fannie Mae believes the servicer acted prudently, Fannie Mae will pursue the delayed claim payment directly. If Fannie Mae determines there was no reasonable explanation for the delay, the servicer must advance its own funds to pay the claim amount due Fannie Mae.

To make sure that an MI claim settlement is sent directly to Fannie Mae’s lockbox, the servicer must show Fannie Mae’s name and address as follows:

Fannie Mae

P.O. Box 277672

Atlanta, GA 30384–7672

Filing an MI Claim with FHA

For an FHA mortgage loan, the servicer must complete the actions shown in the following table, in accordance with E-4.5-02, Filing MI Claims for FHA Mortgage Loans.

The servicer must...

Ensure the claim settlement is sent directly to Fannie Mae’s lockbox. To do so, the servicer must use the following Fannie Mae name and address on the claim form:

Fannie Mae

P.O. Box 9776

Washington, DC 20016 —9776

Upon Fannie Mae’s request, email a copy of the FHA claim payment advice letter to fnma_claims@fanniemae.com.

Note: The servicer must send the claim payment advice letter within two business days after receiving the request from Fannie Mae.

Analyze FHA’s claim payment advice letter (particularly those in which interest is curtailed or expenses are disallowed) to determine whether to

  • file a supplemental claim, or

  • contact FHA to offer an explanation that will reverse the curtailment or disallowance.

Note: Any appeal must be submitted within three months of FHA’s denial letter.

Filing an MI Claim for an FHA Mortgage Loan without Conveying Title to FHA

If FHA specifically directs the servicer to submit a claim without conveying the title to the property to HUD, the servicer must comply with all aspects of FHA’s claim without conveyance procedures in accordance with E-4.5-02, Filing MI Claims for FHA Mortgage Loans. These procedures include:

  • providing required notices to FHA,

  • bidding the amount specified by FHA, and

  • adhering to any other request made by FHA.

The servicer must use FHA Mortgagee Number 9500109998 when the claim forms require Fannie Mae’s FHA Mortgagee Number.

Requesting an Extension from FHA for Filing an MI Claim

If the servicer cannot convey title to FHA, submit the required title evidence or fiscal data, or file a supplemental claim within the time frames FHA allows, it must send aMortgagee’s Request for Extensions of Time (Form HUD 50012) to its local HUD office in accordance with E-4.5-02, Filing MI Claims for FHA Mortgage Loans. The request must include the information shown in the following table.

The servicer must...

Provide a valid reason for requesting the extension.

Define the circumstances that prevent the servicer from taking the timely action.

Mail the form at least 10 days before the allowable time period has elapsed.

Filing a Claim for an Unsold FHA Coinsured Property

In accordance with E-4.5-03, Filing MI Claims for FHA Coinsured Mortgage Loans, if the property secured by an FHA coinsured mortgage loan is not sold within six months of the foreclosure, the servicer must notify FHA before the expiration of this period. FHA will then arrange for an independent appraisal to determine the value of the property for claim purposes.

The servicer must complete the actions shown in the following table.

The servicer must...

File the MI claim within 15 days after receiving FHA’s notice of the appraised value of the property.

Send Fannie Mae a deed and any other documents necessary to convey title from Fannie Mae to the servicer. Fannie Mae will return the executed documents to the servicer for recordation.

Filing a Claim for an FHA Coinsured Property that Fannie Mae Sold

If Fannie Mae is able to sell the property within six months after the foreclosure sale, Fannie Mae will notify the seller as soon as the sales contract has been finalized. The servicer must adhere to FHA’s procedures shown in the following table, in accordance with E-4.5-03, Filing MI Claims for FHA Coinsured Mortgage Loans.

The servicer must...

File a Single-Family Application for Insurance Benefits (HUD Form 27011) with FHA within 15 days after the new mortgage loan is closed.

Upon Fannie Mae’s request, email a copy of the FHA claim payment advice letter to fnma_claims@fanniemae.com.

Note: The servicer must send the claim payment advice letter within two business days after receiving the request from Fannie Mae.

Filing an MI Claim for a Section 184 Mortgage Loan

For properties secured by HUD Section 184 mortgage loans, the servicer must follow the procedures in the following table, in accordance with E-4.5-05, Filing MI Claims for HUD Section 184 Mortgage Loans.

The servicer must...

Instruct HUD to send the proceeds to

Fannie Mae

P.O. Box 9776

Washington, DC 20016–9776

Submit a request for expense reimbursement after filing the claim to request reimbursement for any HUD-authorized fees and expenses that it advanced.

Upon Fannie Mae’s request, email a copy of the HUD claim payment advice letter to fnma_claims@fanniemae.com.

Note: The servicer must send the claim payment advice letter within two business days after receiving the request from Fannie Mae.

Filing a Guaranty Claim with VA

In accordance with E-4.5-06, Filing MI Claims for VA Mortgage Loans, the servicer must follow the procedures shown in the following table.

The servicer must...

Ensure the claim settlement is sent directly to Fannie Mae’s lockbox. To do so, use the following Fannie Mae name and address on the claim form and on the billing for the “upset price.”

Fannie Mae

P.O. Box 277672

Atlanta, GA 30384–7672

Within two business days after filing the guaranty claim, email a copy of the VA guaranty claim payment advice letter to fnma_claims@fanniemae.com.

Filing an RD Guarantee Claim on Fannie Mae’s Behalf

In accordance with E-4.5-07, Filing MI Claims for RD Mortgage Loans, the servicer must adhere to the requirements set forth in the following table.

The servicer must...

Ensure the claim settlement is sent directly to Fannie Mae’s lockbox. To do so, use the following Fannie Mae name and address on the claim form and on the billing for the “upset price.”

Fannie Mae

P.O. Box 277672

Atlanta, GA 30384–7672

Upon Fannie Mae’s request, email a copy of the RD guarantee claim payment advice letter to fnma_usda_claims@fanniemae.com.

Note: The servicer must send the claim payment advice letter within two business days of receiving the request from Fannie Mae.

Requesting Fannie Mae Approval for Agreements with Government Insurers or Guarantors

The servicer must not enter into any agreement with insurers or guarantors that has the potential to modify loss claim settlements under the terms of the guaranty or insurance contract in accordance with Selling Guide A3-2-01, Compliance with Laws. Prior to entering into an agreement that may potentially impact loss claim settlements under an insurance contract or guaranty, the servicer must submit a request for Fannie Mae's written approval to Fannie Mae's SF CPM Division (see F-4-03, List of Contacts).

The approval request must include...
One of the following in the subject line, as appropriate:
  • Servicing Agreement Review - FHA

  • Servicing Agreement Review - FHA (Reverse Mortgage)

  • Servicing Agreement Review - HUD

  • Servicing Agreement Review - RD

  • Servicing Agreement Review - VA

All details of the proposed agreement, including the proposed effective date and complete terms of the agreement.
Contact information to communicate Fannie Mae’s decision.

Related Announcements

The following table provides references to Announcements that are related to this topic.

Announcements Issue Date
Announcement SVC-2017-10 November 8, 2017
Announcement SVC-2017-04 May 10, 2017
Announcement SVC–2016–07 August 17, 2016