Servicing Guide

Published November 10, 2020

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What are some of the servicer responsibilities in connection with processing a Fannie Mae Short Sale?

The following table provides some of the servicer’s responsibilities in connection with processing a Fannie Mae short sale.

The servicer must...
 

Evaluate the borrower’s eligibility and cash contribution requirements, if any, based on the status of the mortgage loan at the time of the respective evaluation.

 

Advise the borrower of the advantages and disadvantages of agreeing to a short sale.

 

Adhere to the time frames for evaluating the short sale and closing the short sale transaction.

 

Oversee the sale of the mortgaged property by communicating with the listing agent to explain the requirements related to the short sale and refer the agent to HomePath for Short Sales to register the short sale offer, as applicable.

 

Review each sales contract in detail to verify that the terms comply with this Guide.

 

Obtain a property valuation if there’s reason to believe the borrower meets the eligibility requirements and the borrower expresses an interest in a short sale.

 

Review the settlement statement prior to the short sale closing for proper transfer of title.

 

Work with the title company to resolve any issues that may delay the closing, including assisting in subordinate lien releases.

 

Provide instructions to the title company regarding closing of the transaction in compliance with this Guide.

 

Ensure that the borrower has waived reimbursement of any escrow, buydown funds, or prepaid items and assigned any insurance proceeds to Fannie Mae, if applicable.

 

Ensure the sales proceeds are received on a timely basis.

 

Report short sales to Fannie Mae. See D2-4-02, Reporting a Workout Option to Fannie Mae and the Investor Reporting Manual.

 

Appropriately manage liquidation workout options that involve the borrower’s relinquishing ownership of the property to ensure that the borrower’s rights are appropriately protected.

 

Provide evidence of the borrower’s indication of intent to pursue a short sale to Fannie Mae upon request.

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

 

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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

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