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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A2-1-02: Servicer’s Duties and Responsibilities Related to MBS Mortgage Loans (07/13/2016)

This topic contains the following:


Nature of the MBS Trust

The MBS Trust Agreements and the Trust Indentures clarify and document the various roles and capacities of Fannie Mae, including its responsibilities regarding the servicing of MBS mortgage loans. MBS mortgage loans are subject to a Trust Indenture or a Trust Agreement. The MBS trust documents are the governing documents for a Fannie Mae MBS trust and

  • include key servicing requirements;

  • set forth Fannie Mae’s roles as issuer, master servicer, guarantor, and trustee; and

  • describe the servicer’s role as the direct servicer.

Under the MBS Trust Agreements and the Trust Indentures, mortgage loans and the proceeds of those mortgage loans are held by Fannie Mae as trustee for the benefit of the MBS trusts and their beneficial owners, the MBS investors. The servicer is responsible for servicing MBS mortgage loans for the MBS trusts that own the mortgage loans.

Fannie Mae is also the master servicer for the MBS trusts, and, in that capacity, contracts with the servicer as the direct servicer and has the responsibility for assuring that servicing is performed in accordance with the Trust Agreement or the Trust Indenture, as applicable.

Daily servicing operations are performed by the direct servicers pursuant to the MSSC, the Servicing Guide, the MBS commitment and any other applicable agreement (such as a Master Agreement) applicable to the purchase and servicing of mortgage loans in MBS trusts. The Trust Agreement uses the term “Servicing Contract” to refer to any of the agreements between the servicer and Fannie Mae relating to the servicing of MBS mortgage loans.

By servicing MBS mortgage loans, the servicer agrees that

  • a successor to Fannie Mae as master servicer for the MBS trusts automatically will succeed to the rights of Fannie Mae under any Servicing Contract and will have authority to enforce the terms and conditions of the applicable Servicing Contract, including the authority to terminate the servicer, in accordance with the terms of the Servicing Contract, and to appoint a replacement servicer; and

  • Fannie Mae as trustee, on behalf of the trusts, and Fannie Mae as guarantor are third-party beneficiaries of the Servicing Contract between that servicer and Fannie Mae as master servicer, with the authority to enforce such contract under certain conditions.

The servicer’s duties and responsibilities and its obligations under the Lender Contract do not change on the basis of whether the mortgage loan is a portfolio or MBS mortgage loan. Fannie Mae has fiduciary responsibilities to MBS certificate holders, and as such it imposes certain restrictions on the servicer’s authority as it relates to servicing MBS mortgage loans (some of which also may apply to mortgage loans that are not securitized).


Prohibited Actions

The servicer must not take the following actions with respect to an MBS mortgage loan:

  • Sell or hypothecate the mortgage loan (or a participation interest in a mortgage loan), other than repurchasing it for its own account under the provisions of Chapter A1–3, Repurchases, Indemnifications, and Make Whole Payment Requests.

  • Modify any of the terms of the mortgage loan (including the extension of a future advance or a release of a borrower from liability), unless either Fannie Mae agrees to a mortgage loan modification as a means of preventing foreclosure of the mortgage loan, or the servicer releases the borrower from liability in connection with an eligible property transfers as outlined in D1-4.1-02, Allowable Exemptions Due to the Type of Transfer.

  • Repurchase or reclassify any MBS mortgage loan for the purpose of modifying any of the terms of the mortgage loan (including the extension of a future advance or a release of a borrower from liability), or for any other reason, unless Fannie Mae specifically permits or requires repurchase or reclassification, or unless Fannie Mae specifically agrees. See D2-3.1-02, Conditions of a First and Second Lien Mortgage Loan Modification for an MBS Mortgage Loan for additional information.

  • Defer the exercise of any right to accelerate the mortgage loan debt, except as is consistent with Fannie Mae’s policy of considering certain types of transfers of ownership as exempt transactions or agreeing to forbearance or mortgage loan modifications for delinquent borrowers. SeeSection D1–4.1, Information Related to Transfers of Ownership Applicable to All Mortgage Loans for additional information.

  • Exercise any “call option” provided for by the terms of a conventional mortgage loan, unless Fannie Mae normally requires such options to be exercised for mortgage loans in its portfolio. See D1-5-01, Call Options and Cross-Default Provisions for additional information.

  • Release all or any portion of the property from the mortgage lien, except in accordance with the terms of the mortgage loan, an approved partial release, or under a court order or decree, and then only to the extent that Fannie Mae allows for, for mortgage loans in its portfolio.

  • Accept a voluntary Mortgage Release under any conditions other than those Fannie Mae allows for, for mortgage loans in its portfolio, as described in D2-3.3-02, Fannie Mae Mortgage Release (Deed-in-Lieu of Foreclosure).

  • Exercise any “put option” provided by a mortgage loan, such as the optional assignment of certain FHA Section 221 mortgage loans following their twentieth anniversary.

  • Change an ARM index or the manner in which the index values are selected, unless specifically provided for in the mortgage loan documents. See Chapter C-2, Servicing ARM Loans and Chapter A1–3, Repurchases, Indemnifications, and Make Whole Payment Requests for additional information.


Servicing Requirements of MBS Mortgage Loans

The following mortgage loans, when securitized into an MBS pool directly from Fannie Mae’s portfolio (referred to as PFP mortgage loans), must be serviced as MBS mortgage loans:

  • all mortgage loans that have been sold to Fannie Mae as whole mortgage loans, and

  • any MBS mortgage loan that was reclassified into Fannie Mae’s portfolio.


Note: This requirement does not change the servicer’s existing reporting and remitting requirements for these mortgage loans nor does it change the custodial depository requirements for the applicable remittance type under which these mortgage loans are serviced.


Fannie Mae notifies the servicer of mortgage loans that have been securitized into an MBS pool. The servicer must code all of these mortgage loans in their records as MBS mortgage loans as soon as possible and service them in accordance with the provisions of the Servicing Guide applicable to MBS mortgage loans.

The servicing requirements of an MBS Trust Agreement or Trust Indenture vary depending on the MBS trust documents under which a particular MBS mortgage loan was pooled. The following table describes the four categories of MBS trust documents.

Category of MBS Trust Documents Description

1980’s Indentures

The various fixed-rate or ARM Trust Indentures (each a “1980’s Indenture”) for MBS mortgage loan pools with issue dates up to and including May 1, 2007.

2007 Amended Trust Agreement

The 2007 Amended Trust Agreement applies to MBS mortgage loan pools with issue dates from June 1, 2007 through December 1, 2008.

2009 Trust Agreement

The 2009 Trust Agreement applies to MBS mortgage loan pools with issue dates from January 1, 2009 through May 1, 2016.

2016 Amended Trust Agreement

The 2016 Amended Trust Agreement applies to MBS mortgage loan pools with issue dates on or after June 1, 2016.

Not all workout options will be available for all MBS mortgage loans. Since the availability of a particular workout option for an MBS mortgage loan depends on the MBS trust documents under which that mortgage loan was pooled, the servicer must identify the issue date of the MBS in order to determine whether a workout option is available to a borrower. The use of one type or a combination of workout options is determined by facts and circumstances related to the particular mortgage loan and the borrower, as such facts and circumstances may change from time to time and include, but are not limited to:

  • whether the workout option is available for the MBS mortgage loan based on which MBS trust documents apply to the MBS mortgage loan; and

  • the applicable Servicing Guide provisions or, in the absence of Servicing Guide provisions, customary servicing practices of prudent servicers in servicing and administering mortgage loans for their own portfolios.

In the Servicing Guide or through its contracts with servicers, Fannie Mae from time to time may limit the availability and application of certain servicing terms stated in a trust document. Thus, the Servicing Guide may be more restrictive than the MBS trust documents with respect to servicing provisions, but neither the Servicing Guide nor any contractual agreement (including variances and waivers) with a servicer may be more expansive than or otherwise inconsistent with the MBS trust documents.

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