Servicing Guide

Published November 10, 2020

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What must a servicer do when an assignment of mortgage is needed when referring a mortgage loan to a law firm for foreclosure proceedings?

When an assignment of mortgage to the party in whose name the foreclosure will be conducted is required (and in all cases as to which MERS is the mortgagee of record), the servicer must adhere to the requirements shown in the following table. 

The servicer must...
 

Have a process to identify the mortgagee of record by the 90th day of delinquency.

 

Ensure that, no later than the time of the foreclosure referral to a law firm, the mortgage has been validly assigned (that is, is legally effective and enforceable) to the party in whose name the foreclosure will be conducted.

The following table provides additional requirements for the assignment of mortgages.

If... Then the servicer...

the property is located in a jurisdiction that recognizes the effectiveness of executed, but unrecorded, assignments

may initiate foreclosure prior to recordation of the assignment.

However, the assignment must be recorded as soon as possible, in compliance with the laws of the jurisdiction where the property is located.

the jurisdiction requires recordation of the assignment to the party in whose name the foreclosure will be conducted before proceeding with foreclosure

must record the assignment before the foreclosure begins (as defined by applicable state or local law).

the MERS is the mortgagee of record

must as quickly as possible prepare and execute (and record, if necessary) the assignment of mortgage from MERS to the party in whose name the foreclosure will be conducted.

the assignment of the mortgage has been executed but not recorded or sent for recording as of the date of the foreclosure referral

must include the original assignment in the referral package sent to the law firm.

applicable law requires that there be an assignment of mortgage to the servicer or Fannie Mae before foreclosure referral, e.g., prior to the sending of a notice of default or right to cure

must prepare and execute (and record, if necessary) the assignment of mortgage in compliance with applicable requirements.

For more information please see:  E-1.1-02: Required Referral Documents

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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.

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