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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D2-3.4-02: Offering a Mortgage Release (Deed-in-Lieu of Foreclosure) for a Second Lien Mortgage Loan (11/12/2014)

This topic contains information on offering a mortgage release (deed-in-lieu of foreclosure) for a second lien mortgage loan.

The following table provides the requirements for the servicer of a seriously delinquent second lien mortgage loan when evaluating a borrower for a Mortgage Release.

The servicer must...

Coordinate with the first lien mortgage loan servicer regarding any proposed action related to the acceptance of a Mortgage Release to determine the following:

  • status of the first lien mortgage loan,

  • intentions of the first lien mortgage loan servicer, and

  • possibility of a mutually arranged disposition.


Order an Owner and Encumbrance Report to ensure that there are no other outstanding liens.

The servicer must obtain Fannie Mae’s prior approval to accept a Mortgage Release. The servicer must follow the procedures in Requesting Approval for a Mortgage Release for a Second Lien Mortgage Loan in F-1-25, Requesting Fannie Mae’s Approval via Fannie Mae’s Servicing Solutions System for requesting Fannie Mae’s approval of a Mortgage Release.

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What are the servicer requirements for evaluating a borrower for a mortgage release for a delinquent second lien mortgage loan?

A second lien mortgage loan may be considered for a Mortgage Release (deed-in-lieu of foreclosure) if the loan is seriously delinquent. ✓ The servicer...

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