Servicing GuideFannie Mae Single Family

11/25/2015

Servicing Guide: Fannie Mae Single FamilyPublished 11/25/2015

11/25/2015

Fannie Mae Copyright Notice

2015 Fannie Mae. No part of this publication may be reproduced in any form or by any meanswithout Fannie Maes prior written permission, except as may be provided herein or unlessotherwise permitted by law. Limited permission to reproduce this publication in print in wholeor in part and limited permission to distribute electronically parts of this publication are grantedto Fannie Mae-approved lenders, servicers, and other mortgage finance professionals, strictly fortheir own use in originating mortgages, selling mortgages to Fannie Mae, or servicing mortgagesfor Fannie Mae. Fannie Mae may revoke these limited permissions by written notice to any or allFannie Mae-approved users.

Trademarks are the property of their respective owners.

A full version of this publication is available on Fannie Mae's website. If there should ever bea difference between this publication as it appears on the AllRegs website and the versionpublished by Fannie Mae, the difference is an error. In such event, the Fannie Mae version of thispublication shall be deemed the correct authoritative version. Material discrepancies between thetwo versions, identified by Fannie Mae or otherwise brought to our attention, may be addressedby Announcement.

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11/25/2015

Printed copies may not be the most current version. For the most current version, go to the online version athttps://www.fanniemae.com/singlefamily/servicing. i

Table of ContentsPreface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xviPart A, Doing Business with Fannie Mae . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Subpart A1, Contractual Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2A1-1, Understanding the Lender Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

A1-1-01, Definition of Seller/Servicer (11/12/2014) . . . . . . . . . . . . . . . . . . . . 3A1-1-02, Application and Approval of Seller/Servicer (11/12/2014) . . . . . . . . . 4A1-1-03, Nature of the Contractual Relationship (11/12/2014) . . . . . . . . . . . . . 6A1-1-04, Evaluating a Servicers Performance (11/25/2015) . . . . . . . . . . . . . . 13

A1-2, Termination of the Lender Contract without Cause . . . . . . . . . . . . . . . . . . . . 17A1-2-01, Servicers Termination of the Lender Contract (11/12/2014) . . . . . . . 17A1-2-02, Fannie Maes Termination of the Lender Contract without Cause(11/12/2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

A1-3, Repurchases, Indemnifications, and Make Whole Payment Requests . . . . . . . 22A1-3-01, Requirements for Voluntary Repurchase (11/12/2014) . . . . . . . . . . . 23A1-3-02, Fannie Mae-Initiated Repurchases, Indemnifications, Make WholePayment Requests and Deferred Payment Obligations (02/11/2015) . . . . . . . . 25A1-3-03, Repurchase Obligations Related to Bifurcated Mortgage Loans(02/11/2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40A1-3-04, Reporting the Repurchase (11/12/2014) . . . . . . . . . . . . . . . . . . . . . . . 50A1-3-05, Repurchase of a Home Affordable Modification Program MortgageLoan (11/12/2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51A1-3-06, Redelivering a Mortgage Loan (11/12/2014) . . . . . . . . . . . . . . . . . . . 51A1-3-07, Automatic Reclassification of MBS Mortgage Loans (07/08/2015). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52A1-3-08, Custodial Document Requirements (11/12/2014) . . . . . . . . . . . . . . . 53

A1-4, Breach of Contract and Nonperformance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54A1-4.1, Remedies Available to Fannie Mae . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

A1-4.1-01, Defining a Breach of Contract (11/12/2014) . . . . . . . . . . . . . . 55A1-4.1-02, Fannie Maes Remedies (11/12/2014) . . . . . . . . . . . . . . . . . . . 57

A1-4.2, Imposition of Compensatory Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62A1-4.2-01, Compensatory Fees Other Than Delays in the LiquidationProcess (11/12/2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62A1-4.2-02, Compensatory Fees for Delays in the Liquidation Process(01/14/2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

Subpart A2, Getting Started with Fannie Mae . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72A2-1, Servicer Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

A2-1-01, General Servicer Duties and Responsibilities (06/10/2015) . . . . . . . . 73A2-1-02, Servicers Duties and Responsibilities Related to MBS MortgageLoans (11/12/2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

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Printed copies may not be the most current version. For the most current version, go to the online version athttps://www.fanniemae.com/singlefamily/servicing. ii

A2-1-03, Execution of Legal Documents (11/12/2014) . . . . . . . . . . . . . . . . . . 83A2-1-04, Note Holder Status for Legal Proceedings Conducted in theServicers Name (11/12/2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85A2-1-05, Use of Fannie Mae Trademarks (11/12/2014) . . . . . . . . . . . . . . . . . . 87A2-1-06, Subservicing (06/10/2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90A2-1-07, Second Lien Mortgage Loan Requirements (11/12/2014) . . . . . . . . . 94A2-1-08, Compliance with Requirements and Laws (04/08/2015) . . . . . . . . . . 99

A2-2, Refinance and Lending Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105A2-2-01, Questionable Refinance Practices (11/12/2014) . . . . . . . . . . . . . . . . 105A2-2-02, Responsible Lending Practices (11/12/2014) . . . . . . . . . . . . . . . . . . 106A2-2-03, Prohibited Refinance Practices (11/12/2014) . . . . . . . . . . . . . . . . . . 106

A2-3, Servicer Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110A2-3-01, Servicer Compensation (11/12/2014) . . . . . . . . . . . . . . . . . . . . . . . . 110A2-3-02, Servicing Fees for Portfolio and MBS Mortgage Loans(10/14/2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112A2-3-03, Yield Differential Adjustments (11/12/2014) . . . . . . . . . . . . . . . . . . 113A2-3-04, Late Charges as Compensation (11/12/2014) . . . . . . . . . . . . . . . . . . 115A2-3-05, Fees for Special Services (11/12/2014) . . . . . . . . . . . . . . . . . . . . . . 115A2-3-06, Prepayment Premiums (11/12/2014) . . . . . . . . . . . . . . . . . . . . . . . . 117

A2-4, Fannie Maes Quality Control Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118A2-4-01, Quality Control Reviews (11/12/2014) . . . . . . . . . . . . . . . . . . . . . . 119

A2-5, Individual Mortgage Loan Files and Records . . . . . . . . . . . . . . . . . . . . . . . . 127A2-5.1, Ownership, Establishment and Maintenance of Mortgage Loan Filesand Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

A2-5.1-01, Ownership of Individual Mortgage Loan Files and Records(11/12/2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128A2-5.1-02, Overview of Individual Mortgage Loan Files and Records(11/12/2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130

A2-5.2, Retention and Examination of Individual Mortgage Loan Files andRecords . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

A2-5.2-01, Storage of Individual Mortgage Loan Files and Records(11/12/2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135A2-5.2-02, Seller/Servicers or Document Custodians ElectronicTransactions with Third Parties (11/12/2014) . . . . . . . . . . . . . . . . . . . . . 138A2-5.2-03, Retention and Storage of Individual Mortgage Loan Filesand Records (11/12/2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

A2-6, Requirements Related