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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What are the servicer general requirements for suspending foreclosure proceedings?

If a mortgage loan has been referred to foreclosure prior to receipt of a complete BRP, the servicer may delay the foreclosure process without requesting Fannie Mae’s prior written approval pursuant to the terms and conditions set forth below:

  • the BRP must be complete before any legal action may be postponed, except if

    • an offer for a short sale has been made based upon the servicer’s evaluation of the borrower for a short sale without receiving a complete BRP in accordance with Evaluating a Borrower to Determine Eligibility for a Fannie Mae Short Sale in D2-3.3-01, Fannie Mae Short Sale; or

    • a solicitation for a Fannie Mae Flex Modification has been made and the borrower contacts the servicer within 14 days of the date of the offer to indicate an intent to accept the offer (see Soliciting the Borrower for a Fannie Mae Flex Modification in D2-3.2-06, Fannie Mae Flex Modification. In such event, the servicer must delay the next legal action in the foreclosure proceeding until the last day of the month in which the first payment is due. If the borrower’s payment is not received by such date, the servicer must proceed with the foreclosure process;

  • in cases where a payment is required under the terms of a retention offer including a Trial Period Plan based on a complete BRP, and the borrower indicates acceptance of the offer (either verbally or in writing), the servicer must delay the next legal action in the foreclosure proceeding until the borrower fails to make the first payment under the terms of the proposed workout. Verbal or written acceptance, without payment or execution of required documents, serves only to postpone the foreclosure process. A workout plan may not be consummated without an Evaluation Notice as required by the particular workout plan;

  • if the servicer receives the first payment in a timely manner in accordance with the terms of a Trial Period Plan, repayment plan, or forbearance plan, the servicer must delay the next legal action until the borrower breaches the plan;

  • fourteen-day delay periods may be extended in order to postpone or repeat the next legal action or postpone a foreclosure sale if necessary under state or local law;

  • if Fannie Mae approves a short sale purchase offer, the servicer must suspend the foreclosure sale to allow the short sale to close as permitted under state or local law; and

  • if a notice of trustee/sheriff sale has been recorded and the servicer is notified of borrower approval by the HFA, the servicer may postpone the foreclosure proceedings. However, if a foreclosure sale is scheduled less than seven days from the date the servicer is notified of borrower approval by the HFA, the servicer must not notify the attorney to “place on hold” or suspend the foreclosure proceedings.

When the servicer receives a complete BRP, it must delay the next legal action in the foreclosure process as required by these provisions as long as delays are permitted under applicable law. The next legal action will be the next step required by law to proceed with the foreclosure action, such as publication or service of process, but does not include administrative actions, such as title searches or document preparation.

In some states, the judge may dismiss the case for “lack of prosecution” if the workout plan is not filed with the court as part of the foreclosure proceedings. If this happens and the borrower subsequently defaults under the executed workout plan, the foreclosure proceedings will have to be restarted, which will result in extra foreclosure fees and expenses. In such cases, Fannie Mae will not reimburse the servicer for the resulting additional fees and expenses.

The servicer is not in violation of these requirements to the extent that a court or public official fails or refuses to halt some or all activities in the matter after the servicer has made reasonable efforts to move the court or request the public official for a cessation of the activity or event.

In applicable foreclosure actions where there is no foreclosure sale and title is transferred by court order, where possible and subject to applicable law, the servicer must use the estimated court order docket date, if known, in place of the foreclosure sale date in this topic’s requirements.

The limitations described in the remainder of this section apply only to suspensions initiated by the servicer without Fannie Mae's approval and do not apply to suspensions otherwise required by Fannie Mae.

For more information please see: E-3.4-01: Suspending Foreclosure Proceedings for Workout Negotiations 

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