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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A4-2.2-03: Prohibition Against Servicer-Specified Vendors for Fannie Mae Referrals, Use of Vendors, and Outsourcing Companies (04/12/2017)

The servicer cannot directly or indirectly require or encourage law firms to use specified vendors in connection with Fannie Mae referrals, including, but not limited to

  • title companies,

  • posting and publication vendors, and

  • service of process vendors.

The law firm must be allowed to select vendors of its choice based on its assessment of factors such as the cost efficiency, quality, reliability, and timeliness of the services provided by the vendor.

Arrangements with vendors and other service providers, particularly affiliates, must not be influenced by an actual or perceived conflict of interest. The servicer and law firm must use the most cost-efficient and effective vendors to assist in processing foreclosures and bankruptcy cases without regard to arrangements that could provide a financial benefit directly or indirectly to the servicer.

The law firm must obtain Fannie Mae’s prior written approval if it wishes to use a vendor that is the servicer itself, an outsourcing company, or other third-party vendor utilized by the servicer to assist in servicing defaulted mortgage loans, or an affiliate of the servicer, outsourcing company, or third-party vendor. Requests for approval must be directed to Fannie Mae’s Legal Department via email (see F-4-03, List of Contacts).

The servicer must not enter into or participate in any arrangements with an outsourcing company or third-party vendor pursuant to which the servicer receives a direct or indirect benefit of any kind (such as a lower charge for services or a payment) for referring a foreclosure or bankruptcy matter relating to a Fannie Mae mortgage loan to a particular law firm. In addition, the servicer must obtain prior written approval from Fannie Mae’s Legal Department before entering into any arrangement with an outsourcing company or third-party vendor that is not an approved Fannie Mae servicer involving the outsourcing company or third-party vendor undertaking all or substantially all of the servicer’s responsibilities with respect to servicing loans in bankruptcy (see F-4-03, List of Contacts).

Outsourcing companies or third-party vendors must not be permitted to directly or indirectly select, or influence the selection of, the law firms to be used on Fannie Mae mortgage loans.

The servicer, its agents, or any outsourcing firm it employs may not charge either directly or indirectly any outsourcing fee, referral fee, packaging fee, or similar fee in connection with any Fannie Mae mortgage loan. This requirement is in place, in part, to deter actual and potential conflicts of interest that may arise and compromise the overall effectiveness of service provided to Fannie Mae.

To help ensure compliance with this requirement, Fannie Mae explicitly prohibits the following parties from directly or indirectly charging any amounts to (or receiving any payments or any benefits from) law firms or their affiliates in connection with any Fannie Mae mortgage loan or service provided directly or indirectly with respect to any Fannie Mae mortgage loan except as Fannie Mae may expressly permit

  • the servicer,

  • any outsourcing company or other third-party vendor utilized by the servicer to assist in servicing defaulted mortgage loans (for example, referring loans to foreclosure or bankruptcy, monitoring law firm performance, or providing administrative support services), and

  • any affiliate of the servicer, outsourcing company, or third-party vendor.

Fannie Mae does expressly permit the benefit that servicers may receive from law firms having access to and utilizing data obtained from the servicer's systems through "direct sourcing" arrangements.

Any other charges, payments, or benefits from law firms or their affiliates in connection with Fannie Mae mortgage loans will require Fannie Mae's prior written approval.

The servicer is responsible for ensuring compliance with these requirements. The servicer must diligently monitor and manage any outsourcing company or vendor it utilizes to assist with the servicing of defaulted mortgage loans to ensure all Fannie Mae servicing guidelines are fully met in a timely and cost-effective manner.

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