Servicing Guide

Published September 9, 2020

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What are the procedures for filing a mortgage insurance claim when a mortgage loan is liquidated through a Short Sale or Third-Party Sale?

For a mortgage loan liquidated via a short sale or third-party sale, the servicer must complete the actions listed in the following table in relation to the MI claim, in accordance with E-4.5-01, Filing MI Claims for Conventional Mortgage Loans or for Other Mortgage Loans for which Fannie Mae Bears the Risk of Loss. 

The servicer must...
 

Remove the mortgage loan from Fannie Mae’s investor reporting system using Action Code 71.

 

Report the proceeds from the sale through the CRS, using the 357 receipt code for proceeds from a Short Sale and the 311 receipt code for proceeds from a Third-Party Sale.

 

File the MI claim within 30 days after remitting the applicable receipt code to Fannie Mae.

 

Provide the mortgage insurer with a copy of the following documents:

  • the final settlement statement,

  • the property valuation, and

  • the approval letter that states the terms and conditions of any short payoff.

 

Submit a final request for expense reimbursement through the CRS no later than 30 days following the settlement of the third-party sale or short sale.

For more information please see Servicing Guide F-1-06, Filing an MI Claim for a Liquidated Mortgage Loan or Acquired Property.

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