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 conventional mortgage loans?

The servicer must contact its Fannie Mae Servicing Representative (see F-4-03, List of Contacts) to obtain bidding instructions for all conventional second lien mortgage loans.

For all first lien mortgage loans and co-op share loans that are in a first lien position, the servicer must issue bidding instructions based on the following guidelines, which are designed to ensure that a third party's bidding at the foreclosure sale will not result in Fannie Mae's eventually acquiring the property for more than the total mortgage indebtedness or for less than Fannie Mae's reserve price as described in When to Obtain a Reserve Price.

For Fannie Mae's bidding instructions, the servicer must consider whether or not

  • the mortgage loan has MI;

  • the property is located in a state (or jurisdiction) that has a redemption period in which the borrower (or a junior lienholder) can redeem the property for the amount of the foreclosure bid;

  • the property is located in a state (or jurisdiction) that does not have a redemption period, but that levies transfer taxes and/or other related fees and costs on the winning bidder at the foreclosure sale;

  • the property is located in a state (or jurisdiction) that recognizes Fannie Mae's exemption from the payment of real estate transfer taxes; and

  • the property has a property or flood insurance claim that has been filed.

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

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