Servicing Guide

Published October 14, 2020

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What are the requirements for evaluating a borrower when determining eligibility for a Fannie Mae short sale?

The following table provides the requirements for evaluating the borrower to determine eligibility for a Fannie Mae short sale based on the delinquency status of the mortgage loan at the time of the evaluation.

If the mortgage loan delinquency status at the time of evaluation is... Then the servicer must evaluate the borrower for a Fannie Mae short sale...
current or less than 90 days delinquent based on a complete BRP (see D2-2-05, Receiving a Borrower Response Package).

Note: If the mortgage loan is current or less than 60 days delinquent, the servicer must determine that the borrower’s monthly payment is in imminent default in accordance with Evaluating a Borrower for Imminent Default for Fannie Mae Short Sale or Fannie Mae Mortgage Release Eligibility in D2-1-01, Determining if the Borrower’s Mortgage Payment is in Imminent Default.

between 90 days and 18 months delinquent

based on a complete BRP, unless one of the following conditions applies, in which case the servicer must evaluate the borrower for a Fannie Mae Short Sale without received a complete BRP:

  • the borrower failed a Fannie Mae Flex Modification Trial Period Plan within the previous 12 months (see D2-3.2-07, Fannie Mae Flex Modification);

  • the borrower received a Fannie Mae Flex Modification and become 60 days or more delinquent within the first 12 months of the effective date of the mortgage loan modification without reinstating;

  • the borrower completed three or more mortgage loan modifications; or

  • the mortgage loan is not secured by an investment property, as identified at origination, and the borrower’s classic FICO credit score is less than or equal to 

Note: The FICO credit score must be no more than 90 days old as of the date of evaluation. If the servicer obtains multiple credit scores for a single borrower, it must select a representative credit score using the lower of two or the middle of three credit scores. If there are multiple borrowers, the servicer must determine the representative score for each borrower and use the lowest representative score as the credit score for the evaluation.

greater than 18 months delinquent

without receiving a complete BRP.

Note:Fannie Mae also will agree to short sales for FHA, VA, or RD mortgage loans if they comply with all of the insurer’s or guarantor’s guidelines and do not result in a loss to Fannie Mae.

For more information see Servicing Guide D2-3.3-01, Fannie Mae Short Sale.

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