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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How should bidding instructions be issued for FHA-Insured mortgage loans?

The amount the servicer must bid for a FHA-insured mortgage loan depends on when the mortgage loan was endorsed for insurance. The following table provides additional bidding information based on the policy endorsement date. 

If the FHA mortgage loan... Then the bid amount... And the servicer must...

was endorsed for insurance before November 30, 1983

must include the full amount of the indebtedness consisting of the

  • UPB;

  • accrued interest to the date of the sale using the rate in effect for each payment on the date it became due;

  • any advances for T&I; and

  • other foreclosure costs, including attorney fees and any reimbursable property inspection fees.

  • subtract from the total indebtedness any funds that it is holding for a mortgage loan insured under an FHA Escrow Commitment or for a mortgage loan that is subject to an interest rate buydown plan, and

  • send Fannie Mae any funds it holds as soon as the foreclosure sale is held.

was endorsed for insurance on or after November 30, 1983

will vary depending on whether FHA elects to have the property appraised.

When FHA has the property appraised, it will advise the servicer of the amount to bid at the foreclosure sale. The bid amount will reflect the fair market value of the property, appropriately adjusted for FHA's estimate for holding costs and resale costs that it would incur if the property were conveyed.

bid the exact amount specified by FHA as long as the servicer receives FHA’s bid amount within the five days before the foreclosure sale — unless state law requires a higher amount to be bid.

If the servicer does not receive FHA’s bid amount within the five days before the foreclosure sale, it must bid the full amount of Fannie Mae's indebtedness.

For more information please see: E-3.3-05: Issuing Bidding Instructions

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