Unless the mortgage loan is subject to the Fannie Mae automatic reclassification process, Fannie Mae requires that the servicer foreclose while the mortgage loan is in the MBS pool. The servicer then must purchase a regular or modified special servicing option MBS mortgage loan from the MBS pool within 60 days after the foreclosure sale date, or in applicable foreclosure actions where there is no foreclosure sale, the date title is transferred by court order. For additional information regarding reclassifying or removing MBS mortgage loans in foreclosure, see Mandatory Repurchase of Certain MBS Mortgage Loans in A1-3-02, Fannie Mae-Initiated Repurchases, Indemnifications, Make Whole Payment Requests and Deferred Payment Obligations . The servicer must follow the procedures in Remitting a Settlement Received for an MBS Mortgage Loan in F-1-21, Remitting and Accounting to Fannie Mae, for instructions on remitting claim or sales proceeds received for MBS mortgage loans post-foreclosure sale.
For more information please see: E-3.5-01: Reclassifying or Removing MBS Mortgage Loans Post-Foreclosure