In order to assist the servicer in identifying non-routine litigation, the following table lists the categories of non-routine litigation and provides examples of matters that must be reported to Fannie Mae as non-routine litigation. Given the evolving nature of default-related litigation, it is not possible to provide an exhaustive list.
Actions that seek monetary relief against Fannie Mae.
Any claim (including counterclaims, cross- claims, or third-party claims in foreclosure or bankruptcy actions) for damages against Fannie Mae or its officers, directors, or employees.
Actions that challenge the validity, priority, or enforceability of a Fannie Mae mortgage loan or seek to impair Fannie Mae’s interest in an acquired property.
An action seeking to demolish a property as a result of a code violation;
An action seeking to avoid a lien based on a failure to comply with a law or regulation;
An attempt by another lienholder to assert priority over Fannie Mae’s lien or extinguish Fannie Mae’s interests;
A quiet title action seeking to declare Fannie Mae’s lien void; or
An attempt by a borrower to effect a cramdown of a mortgage loan in bankruptcy as to which Fannie Mae has not delegated authority to the servicer or law firm to address.
Actions that present an issue that may pose significant legal or reputational risk to Fannie Mae.
Any issue involving Fannie Mae’s conservatorship, its conservator FHFA, Fannie Mae’s status as a federal instrumentality, or an interpretation of Fannie Mae’s Charter;
Any contention that Fannie Mae is a federal agency or otherwise part of the United States Government;
Any “due process” or other constitutional challenge;
Any challenge to the methods by which Fannie Mae does business;
Any putative class action involving a Fannie Mae mortgage loan;
A challenge to the standing of the servicer to conduct foreclosures or bankruptcies that, if successful, could create negative legal precedent with an impact beyond the immediate case;
A challenge to the methods by which MERS does business or to its ability to act as nominee under a mortgage;
Any “show cause orders” or motions for sanctions relating to a Fannie Mae mortgage loan, whether against Fannie Mae, the servicer, a law firm, or a vendor of the servicer or law firm;
Any foreclosure on Native American tribal lands;
Any environmental litigation relating to a Fannie Mae loan;
A need to foreclose judicially in a state where non-judicial foreclosures predominate;
Any claim invoking a Fannie Mae HAMP as a basis to challenge a foreclosure;
Any cross-border insolvency proceeding under Chapter 15 of the Bankruptcy Code;
Any claim of predatory lending or discrimination in loan origination or servicing; or
Any claim implicating the interpretation of the terms of the Fannie Mae/Freddie Mac Uniform Mortgage Instruments.
For more information please see: E-1.3-01: General Servicer Responsibilities for Non-Routine Matters