Servicing Guide

Published June 10, 2020

The Servicing Guide is organized into parts that reflect how lenders generally categorize various aspects of their business relationship with Fannie Mae. To begin browsing, select from any of the sections below. You may also download the entire Servicing Guide in PDF format.

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Fannie Mae Property Preservation Matrix- April 2019 (Section 5: Initial Securing and Initial Services) (Property Interior)

Section 5: Initial Securing and Initial Services

See below for sub-topic: Section 5: Initial Securing and Initial Services: Initial Services: Property Interior

To see other sub-topics for Section 5: Initial Securing and Initial Services, please click on any of the topics below:

Section 5: Initial Securing and Initial Services: Overview  

Section 5: Initial Securing and Initial Services: Initial Securing

Section 5: Initial Securing and Initial Services: Property Exterior

Section 5: Initial Securing and Initial Services: Identifying Property Conditions

Initial Services: Property Interior

The servicer is expected to perform all of the below Initial Interior Services within fourteen (14) calendar days from the FTV. When a property securing a Fannie Mae loan includes multiple units, each unit used as collateral for the loan must also have services performed as it becomes vacant.       

Interior Debris Removal / Move Personal Property

Interior debris removal is limited to:

  • Raw garbage
  • Perishable items

Examples of interior debris that are not authorized to be removed include, but are not limited to:

  • Alcohol        
  • Antifreeze
  • Canned goods    
  • Cleaning agents
  • Gas cans        
  • Medicine/syringes
  • Oil        
  • Paint cans
  • Paint thinner    
  • Pesticides
  • Pool chemicals        
  • Pressurized tanks
  • Propane tanks        
  • Tires
  • Toiletries    

Moving interior personal property is limited to personal property obstructing the servicer from completing initial and/or ongoing services. 

The Debris Removal and the Move Personal Property Allowables include a combined maximum of 10 cubic yards for the removal of raw garbage, perishable items, debris, and/or moving of personal property. The combined maximum of 10 cubic yards is inclusive of interior and exterior debris removal and the moving of any personal property. A cubic yard is defined as 3’ x 3’ x 3’ or 27 cubic feet and is measured by volume, not weight or content. 

When 11-20 cubic yards of combined interior and exterior debris is found, the servicer may elect to complete the work and then submit a bid after the fact via HomeTracker for the additional cubic yards. Refer to Section 12: Bid After The Fact within this Property Preservation Guide for further details. The servicer must provide before and after photos to support total debris removed from property, not just the overage. Refer to Section 17: Addendums within this Property Preservation Guide for debris count and personal property references.  

When to Submit a Bid    

  • When more than 20 cubic yards of combine interior and exterior debris removal and/or moving personal property needs to be performed, the servicer must stop debris removal/moving personal property work and submit a bid via HomeTracker. 
  • When the servicer decides to address debris removal/moving personal property outside of the allowable threshold and prior to Fannie Mae approval, the servicer should take into account Fannie Mae may not agree with the cubic yard count and/or cost and may deny and/or modify the request.     

What To Do If

If…

Then…

Extraordinary circumstances arise (e.g., meth lab, hoarder site, crime scene, etc.),

Stop debris removal and notify Fannie Mae about the issue by submitting the proper bids via HomeTracker. The servicer must provide details of extraordinary property conditions after liquidation to the Fannie Mae REO broker.

The servicer encounters an infestation (e.g., fleas, rodents, etc.) which hinders the ability to perform services,

Utilize the Extermination Allowable to address pests such as fleas, rodents, ants, wasps, and hornets using over the counter products and continue with services.

Photo Examples

Cleaning Refrigerator or Stand-Alone Freezer    

The servicer must clean all refrigerators and stand-alone freezers when necessary. This includes the removal of all perishable contents, wiping down and cleaning the inside and outside of the refrigerator and freezer and/or standalone freezer(s).

Photo Examples

Cleaning Toilets

The servicer must clean the toilet when waste is present. This includes cleaning both the inside and outside of the toilets.

Photo Examples

Winterization and Re-Winterization

The servicer must winterize the main dwelling and any additional units and ensure water is off and winterization remains intact while the property is delinquent and vacant. An additional unit is defined as a property with multiple designations in the address or a detached livable structure. 

Winterization includes shutting the water source off at the curb and at the main interior water supply. The servicer must shut off one water source when it is not possible to shut off both. Winterization also includes a complete draining of all plumbing/heating systems, pouring of adequate amounts of antifreeze into all fixture traps (e.g., sink, toilet tanks/bowls, etc.) and completing a system check, as well as anything additional required to winterize the system properly dependent upon the system type (e.g., dry, radiant, wet/steam). 

When a pressure test fails, the servicer must still complete a partial winterization which includes, but is not limited to, shutting off/closing all valves, draining the water heater (if existing) and removing all water from the plumbing lines. Where possible, the servicer must attempt to identify the source/reason for pressure test failure.  

Properties must be re-winterized if a winterization is compromised.  

Note: There is not a winterization season. Winterizations are expected to be performed year round with the exception of Hawaii, Guam, Puerto Rico, and the Virgin Islands.   

What To Do If

If…

Then…

The property has shared utilities (e.g., townhome, condos, etc.) or has a fire sprinkler system in a state that is known to freeze,

Transfer and maintain the utility(ies) that supply the heat in the servicer’s name. Set the heat on the thermostat to 55 degrees. When the heat source requires repair or is missing, submit bids via HomeTracker.

The water heater has a dedicated gas valve,

Ensure the gas valve is turned off and/or capped, if necessary.

Additional Photo Requirements

  • Before, during and after photo of clean toilet with correct antifreeze solvent used. 

  • Photo of antifreeze solvent being poured into traps, drains, and sinks

  • Photo of water heater breaker turned off, if applicable. 

  • Photo of air compressor attached to system to show pressure test being performed. Include before and after photos of the gauge readings.

  • Photo of meter or union disconnected and capped, if allowed by local municipality. 

  • Photo of water tank being drained, if applicable.

  • Photo noting any damages. 

  • Photo of winterization stickers/tags applied

Photo Examples

  

Capping Wires 

The servicer must cap any exposed, bare wires. Capping wires includes but is not limited to:      

  • Open electrical outlets
  • Exposed light fixtures 

Photo Examples

Capping Water / Sewer Lines 

The servicer is to cap water/sewer lines regardless of utility status. Capping water/sewer lines includes but is not limited to:

  • Washing machine line
  • Missing hose bibs
  • Open hot/cold water lines (e.g., refrigerator water line, dishwasher, etc.)
  • Open toilet flange

Photo Examples

Capping Gas Lines 

The servicer must cap all gas lines regardless of utility status.

Photo Examples

Extermination    

The Extermination Allowable is be used to eliminate rodents, wasps, hornets, bees, termites, and mosquitos in standing water, as well as to seal the points of entry.

Only condo/townhome (units with shared walls) may use the allowable for roaches. Fleas may only be exterminated when the infestation prohibits access to the property. Any extraordinary extermination over the allowable requires two estimates from qualified/licensed/certified exterminators to be submitted simultaneously via HomeTracker. Refer to Section 2: Technology and Photos within this Property Preservation Guide for bid submission guidelines.

When the property has a pool, Fannie Mae expects the servicer to utilize the Extermination Allowable to use mosquito prevention products to drop into the pool prior to covering the pool.

Note: In most cases for extermination, over-the-counter products can be used (e.g., mouse traps, flea bombs, wasp spray, etc.). Use environmentally-friendly, cost conscious mosquito prevention products when addressing pools of water. Ideally, any extermination necessary will be completed at the time of the initial or ongoing services to the property.

Note: Cost estimators are permissible in lieu of the second qualified extermination contractor bid. However, Fannie Mae reserves the right to request a second qualified extermination contractor bid.

Photo Examples

Repair / Replace Sump Pump

When the property is designed to have a sump pump to keep the basement or crawl space dry, the servicer must:

1.    Transfer the electricity into its name.

2.    Verify electricity is on.

3.    Verify the electrical system is operational.

4.    Verify the sump pump is working through the property’s utilities and not solely from a generator.  

The sump pump and electricity must be verified as operational within seven (7) calendar days of the electricity being transferred into the servicer’s name.

When the sump pump is inoperable, the servicer must use the Sump Pump Allowable to repair or replace the pump, plumbing or electric lines to the sump pump. When electricity cannot be restored due to electrical damages, bids must be submitted via HomeTracker. The allowable may also be used to reroute or extend the exterior discharge hose to divert the water away from the house.

What To Do If

If…

Then…

There is no crock for a sump pump present,

No action is required. Sump pump is not utilized at the property.

The crock is broken or cracked,

Utilize the Sump Pump Allowable to repair or replace the crock.

Photo Examples

Dead Animal Removal

The Dead Animal Removal Allowable is for the removal of dead vermin/dead animal(s) and must be used for their removal and disposal. In most cases, the entire allowable is not necessary to remove one dead animal.

Basement Moisture Control

The Basement Moisture Control Allowable is provided to ensure basements stay as dry as possible and reduce or eliminate the potential for foul, musty odors, or possible discoloration. This allowable is only for properties with a basement. The moisture control product has minimal costs and is readily available.

Expectations 

  • This allowable must only be used in properties with a basement.
  • The servicer must place a moisture control product at initial services. Then every sixty (60) days during ongoing services, the servicer must dispose of the product and replace it with new product.
  • The amount of moisture control product to use is dependent on the square footage of the basement and upon the product. Follow all product manufacturer’s directions for activation. 
  • The servicer must write in permanent marker all of the following: install date (mm/dd/yy), the expiration date (mm/dd/yy and to be sixty (60) days out from install date), and the property address. 

Photo Examples

Plumbing    

In the event water cannot be shut off due to damaged or inoperable shut off valve(s), the servicer must use the Plumbing Services Allowable in order make necessary repairs to shut off water to the property (e.g., repair/replace main shutoff valves/angle stops and interior shut off valves/angle stops).

The Plumbing Services Allowable is not to be utilized on the following:

  • Water faucets/hose bibs
  • Shower heads
  • Repairing/replacing/removing toilets
  • Repairing/replacing water heaters
  • Waste line/traps

What To Do If

If…

Then…

Plumbing is missing and/or vandalized,

Cap all open lines and file insurance/proof of loss claim.

The property has suffered freeze damage,

Cap all open lines and file insurance/proof of loss claim.

The plumbing is found to be in disrepair,

Ensure water is off at the main and all open water lines are capped using the Cap Water Line Allowable and winterize the property. Refer to Winterization / Rewinterization within this section for further guidance.

The plumbing does not hold pressure and damages are not visible,

Ensure water is off at the main and all open water lines are capped using the Cap Water Line Allowable and winterize the property. Refer to Winterization / Rewinterization within this section for further guidance.

Photo Examples

Discoloration

Discoloration is a potential hazard caused by moisture resulting from a specific source. The Address Discoloration Allowable must be used to remove or clean the interior discoloration that will result in further damage or spreading if not addressed. Action should be taken to preserve the property with minimal impact to the existing livable structure(s). The allowable is to only be utilized after the source of the discoloration has been addressed to prevent reoccurrence. 

Expectations 

  • The servicer must cure the source of the discoloration prior to utilizing the Address Discoloration Allowable.

  • The servicer must adhere to applicable legal requirements and/or local ordinance/association standards when they differ from Fannie Mae requirements.

  • Porous Material: Remove porous material (e.g. drywall, insulation, etc.), clean the framing/studs left exposed (behind the discolored surface) by applying antimicrobial and a stain blocking primer when applicable. Remove any resulting debris from the property. 

    • The Address Discoloration Allowable includes removal of all related debris from the property. 

    • The Debris Removal Allowable may not be utilized to remove the resulting discolored debris from the property.

  • Semi-porous/Non-porous Material: Semi-porous/non-porous material (e.g., masonry, concrete, etc.) must be cleaned (and not removed) when cleaning will eliminate the discoloration. 

    • Cleaning should consist of an antimicrobial solution and scrubbing with a stiff brush or pad.

    • Cleaning should extend to an area at least two (2) feet beyond the visible discoloration. After applying anti-microbial solution and scrubbing with a stiff brush or pad, apply a stain blocking primer/masonry sealer/water proofer product when applicable to the surface treated. Do not apply stain blocking primer when the application of the primer will deface the surface treated (e.g., finished cabinetry, wood work, etc.).

  • When discoloration cannot be addressed within the allowable, a bid must be submitted via HomeTracker.

  • Photos documenting work completion must include before, during, and after photos. This includes photos of all removal, treatment using antimicrobial solution, stain blocking primer (when applicable), and haul away/removal of created debris.

When Submitting a Bid

Refer to Section 2: Technology and Photos within this Property Preservation Guide for bid submission guidance and include the following: 

  • Provide dimensions of the affected area (square footage) that will cause further damage if not addressed.
  • Indicate the specific interior location of the damage (e.g., the corner of the kitchen ceiling above the sink).
  • Explain how the source has been/will be corrected. 
  • Provide full scope of work for each affected room on a single bid line.

What To Do If    

If…

Then…

The surface is finished wood,

Scrub down the area with an antimicrobial solution only.

Discoloration removal/cleaning cannot be completed within the allowable,

Submit a bid via HomeTracker. Refer toSection 2: Technology and Photos within this Property Preservation Guide for bid submission guidelines.

Interior personal items are damaged due to discoloration and are unsalvageable,

Utilize the Debris Removal Allowable to remove the discolored personal items from the property in accordance with all applicable laws.

Photo Examples

Emergency Pump Water   

When the property is flooded, appropriate measures must be taken to preserve the property. The servicer must utilize the Emergency Pump Water Allowable to remove any standing water. The servicer must also identify the source of the water intrusion and remedy the source and any resulting damages by using any available allowable(s), when applicable. The servicer must submit a bid to address the source within fifteen (15) calendar days of pumping the water when the source could not be addressed within an allowable. Refer to Section 2: Technology and Photos within this Property Preservation Guide for bid submission guidelines.

What To Do If

If…

Then…

Water intrusion is caused by broken/vandalized plumbing,

Turn water off at the curb and main interior shut off. Remove water using Emergency Pump Water Allowable and cap all open lines within the allowable. File an insurance/proof of loss claim if necessary.

Water intrusion is caused by flood/act of nature,

Remove water using Emergency Pump Water Allowable. Install basement moisture control product using the allowable, if applicable. File an insurance/proof of loss claim if necessary.

Water intrusion is caused by roof leak,

Remove water using Emergency Pump Water Allowable. Utilize the Roof Repair Allowable to patch or repair the roof. If the damage exceeds the allowable or the roof is not repairable, refer to Roof Damages in Section 8: Damaged Properties / Disaster Impacted Properties within this Property Preservation Guide. Refer toSection 2: Technology and Photos within this Property Preservation Guide for bid submission guidelines.

Interior items are damaged due to flooding and are unsalvageable,

Utilize the Debris Removal Allowable to remove the unsalvageable items in accordance with all applicable laws.

Photo Examples   

To see other sub-topics for Section 5: Initial Securing and Initial Services, please click on any of the topics below:

Section 5: Initial Securing and Initial Services: Overview

Section 5: Initial Securing and Initial Services: Initial Securing

Section 5: Initial Securing and Initial Services: Property Exterior

Section 5: Initial Securing and Initial Services: Identifying Property Conditions

 

 

 

 

 

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