Servicing Guide

Published September 9, 2020

For best results, pose your search like a question.

Guide Resources

For a comprehensive list of resources such as forms, announcements, lender letters, notices and more.

Visit Selling and Servicing Guide Communications and Forms

Customers Recommend Ask Poli

AskPoli

If you have additional questions, Fannie Mae customers can visit Ask Poli to get information from other Fannie Mae published sources.

Launch Ask Poli  

Download PDF Guide

You can also download the printable ~800 page PDF, which include links.

Download Now

What are the servicer responsibilities when communicating with a borrower regarding a Fannie Mae Short Sale?

The following table provides the servicer’s responsibilities when communicating, either verbally or in writing, about a short sale with the borrower.

The servicer must advise the borrower of the following...
 

Listing the property for sale may not delay the initiation of foreclosure proceedings, in the event that the foreclosure process has not yet started.

 

He or she must allow the vendor(s) timely and sufficient access to the property for the purpose of obtaining the valuation.

  He or she will remain responsible for maintenance of the property until it is sold and the settlement has occurred. In the event the borrower cannot maintain the property and the property is vacant or abandoned on a delinquent mortgage loan, the servicer must maintain the property in accordance with the Property Preservation Matrix and Reference Guide.
 

If the sales proceeds are not sufficient to satisfy the mortgage loan debt, the mortgage loan holder may require him or her to contribute funds to reduce its loss. See Evaluating a Borrower’s Ability to Make a Cash Contributionfor additional information on evaluating a borrower’s ability to make a cash contribution.

 

There may be possible tax consequences if any portion of the outstanding debt is forgiven, and refer the borrower to IRS Publication 544, Sales and Other Dispositions of Assets, particularly the section captioned “Foreclosure, Repossession, or Abandonment.”

 

He or she must execute all documents that are necessary to sell the property, even though the documents will indicate that the sales proceeds must be paid to the mortgage holder.

 

All sales contracts that will not fully satisfy the outstanding debt must include a contingency clause making the sale of the property “contingent on the mortgage holder’s and the mortgage insurer’s, if applicable, agreement to the sale.”

 

The following cancellation clause must be included in the sales contract:

“The seller’s obligation to perform on this contact is subject to the rights of the mortgage insurer (if any) and the mortgage holder relating to the conveyance of the property.”

For more information please see: D2-3.3-01, Fannie Mae Short Sale.

 

Have You Tried Ask Poli?

Poli knows. Just ask.

Ask Poli features exclusive Q&As and
more—plus official Selling & Servicing
Guide
content.

Try Ask Poli

Related Articles


AskPoli

Customers Recommend Ask Poli

If you have additional questions, Fannie Mae customers can visit Ask Poli to get information from other Fannie Mae published sources.

Guide Resources

For a comprehensive list of resources such as access forms, announcements, lender letters, notices and more.

Visit Selling and Servicing Guide Communications and Forms

X
Having Issues with Seeing this Page Correctly?

Use Firefox or Chrome   How to do a hard refresh in Internet Explorer
We recommend that you use the latest version of FireFox or Chrome.

Download Firefox
Download Chrome
  A hard refresh will clear the browsers cache for a specific page and force the most recent version of a page.
    Hold the Ctrl key and press the F5 key.
     

Email Us
If you still have Technical Support questions, feel free to emailAsk_Poli@fanniemae.com.