Prior to approving a release of liability, the servicer must determine that the transferee's credit and financial capacity is acceptable as required in Chapter D1-4, Transfers of Ownership.
The servicer must refer to the following
For a mortgage loan that has not been modified, the servicer
is authorized to use Fannie Mae's automated underwriting system,
Desktop Underwriter (DU) (see the
If utilizing DU, the servicer must
submit the transaction as a limited cash-out refinance in DU, and
use the original value of the property as defined
Note: For a mortgage loan that has been modified, the servicer must contact Fannie Mae to determine the transferee's credit and financial capacity (see F-4-03, List of Contacts).
The servicer must follow the procedures in
The following table provides the requirements for evaluating a request for a release of liability.
|If the servicer has determined that the transferee...||Then the servicer...|
|is capable of assuming the mortgage loan obligation and
the mortgage loan
||is authorized to approve the release of liability.|
|is capable of assuming the mortgage loan obligation but the mortgage loan has MI and the mortgage insurer does not agree to the release||must deny the request for the release of liability, although
the transfer may still be processed without a release of liability.
Note: The denial must state the mortgage insurer’s decision as its reason for not approving the request.
|is not capable of assuming the mortgage loan obligation||must deny the request for release of liability, although the transfer may still be processed without a release of liability.|
The following table provides references to Announcements that are related to this topic.
|Announcement SVC-2017-10||November 8, 2017|