Servicing Guide

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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E-3.5-02: Handling Third-Party Sales (07/12/2017)

The following table provides the servicer with requirements for properly handling a third-party sale.

The servicer must...

Collect the gross sale proceeds and remit the amount Fannie Mae is due within five business days after it receives the final payment from the third-party bidder.

The servicer must follow the procedures in Reporting Third-Party Sales to Fannie Mae in F-1-08, Managing Foreclosure Proceedings, as well as Remitting Third-Party Sales Proceeds to Fannie Mae in F-1-21, Remitting and Accounting to Fannie Mae, for additional instructions.


Remit the third-party bidder's initial deposit to Fannie Mae within five business days after discovery that a sale will not be finalized.


Within 14 days of the later of the date the foreclosure sale is completed (including receipt of funds), or when applicable, the date the court confirms or ratifies the sale:

  • ask the property insurance carrier to cancel the policy and, unless prohibited by the policy or applicable law, send the servicer any unearned premium refund; or

  • request cancellation of Fannie Mae’s mortgagee interest in the policy and removal of its name from the policy if the insurance carrier is not willing to cancel the policy because Fannie Mae is not the named insured.


Continue performing necessary activities including property inspections to protect Fannie Mae’s interest in the property until the later of the date the foreclosure sale is completed (including receipt of funds), or when applicable, the date the court confirms or ratifies the sale.

Note: The servicer must adhere to D2-2-10, Requirements for Performing Property Inspections and the Property Preservation Matrix and Reference Guide until one of these occur.

Any excess sales proceeds must be distributed in accordance with applicable law.


Note: Fannie Mae will reimburse the servicer for expenses incurred after the third-party sale in compliance with Servicing Guide requirements. The servicer must follow the procedures in F-1-05, Expense Reimbursement and Requesting Fannie Mae Approval for Property Preservation and Maintenance in F-1-08, Managing Foreclosure Proceedings.


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