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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F-1-08: Managing Foreclosure Proceedings (11/14/2018)

This Servicing Guide Procedure contains the following:


Reporting Environmental Hazards to Fannie Mae

The servicer must not begin foreclosure proceedings for any mortgage loan if it becomes aware of environmental hazards (hazardous waste materials, excessive tires, oil spills, etc.) affecting the security property, in accordance with E-1.2-02, Timing of the Foreclosure Referral for Mortgage Loans Generally. Instead, the servicer must report the information to its Fannie Mae Servicing Representative (see F-4-03, List of Contacts). Also see the Property Preservation Matrix and Reference Guide for additional information.

Regardless of whether Fannie Mae is named as a party in any environmental litigation, it must be considered non-routine and the servicer must immediately notify Fannie Mae’s Legal department by submitting a Non-Routine Litigation Form (Form 20). Also see E-1.3-02, Reporting Non-Routine Litigation to Fannie Mae for additional information.

When the servicer learns about the issuance of a lead-based paint citation, obtains other evidence of lead-based paint law violations, or becomes aware of threatened environmental litigation relating to a mortgage loan that it intends to refer to foreclosure, it must report the information in the following table to its Fannie Mae Servicing Representative (see F-4-03, List of Contacts) within 30 days after the mortgage loan is referred for foreclosure if the security property is a one-unit investment property or a two- to four-unit property.

The notification to Fannie Mae must include...

The current value of the property based on, at a minimum, an exterior inspection of the property and, if the borrower is cooperative, an interior inspection.


The amount of Fannie Mae’s outstanding debt.


The number of children under eight years of age residing in the property, giving the exact age of each such child (if any) and, in the event the property is a two- to four-unit property, the unit(s) with children residing in them.


A copy of any documentation it has obtained related to lead-based paint law violations (including actual lead-based paint citation) or threatened or pending lead-based paint litigation.


Note: When the property is located in Massachusetts, the servicer must conduct an actual search to determine whether there are any outstanding lead-based paint citations against the property or property owner just before it decides to refer a mortgage loan to foreclosure. For the most part, Fannie Mae expects that a lead-based paint citation search will involve simply making a phone call to the appropriate oversight authority (such as the local housing court, department of health, etc.). However, if a citation search becomes more complex, Fannie Mae will reimburse the servicer for the actual costs of each required citation search it conducts. To determine whether reimbursement for a specific search is warranted, the servicer must contact its Fannie Mae Servicing Representative (see F-4-03, List of Contacts).


If, during the search, the servicer discovers that a lead-based paint citation has been issued, it must contact its Fannie Mae Servicing Representative (see F-4-03, List of Contacts) immediately so Fannie Mae can evaluate the details of the specific case and advise the servicer of the actions it must take (including postponement of the foreclosure sale, if necessary). If Fannie Mae advises the servicer to proceed with the foreclosure action, the servicer must conduct another search immediately before the foreclosure sale is held to ensure no additional citations were issued against the property subsequent to its earlier search.


Requesting Fannie Mae Approval for Property Preservation and Maintenance

When the cost of the contemplated preservation work exceeds Fannie Mae’s allowable amount, the servicer must submit the request via HomeTracker for Fannie Mae approval, in accordance with E-3.2-12, Performing Property Preservation During Foreclosure Proceedings. Also see the Property Preservation Matrix and Reference Guide for additional information. The following table provides instructions when the servicer has not acquired access to HomeTracker.

The servicer must...

Complete a Property Preservation Request for Repair (Form 1095).


Attach all photographic evidence along with pertinent supporting documentation to assist Fannie Mae in making a sound decision concerning the proposed maintenance.


Submit the completed form and all attachments to

Once the request for repair is received, Fannie Mae will determine if other bids and/or information are necessary. Fannie Mae will send an email to the servicer at the email address provided on the request for repair to indicate either

  • additional bids and/or information are necessary, or

  • the amount for the preservation work is approved.


Foreclosure Sale Marketing and Foreclosure Auction Services

When marketing the foreclosure sale for a property securing a conventional first lien mortgage loan in select jurisdictions in accordance with E-3.3-04, Marketing the Foreclosure Sale and Using Foreclosure Auction Services, the servicer must use a vendor identified in the Foreclosure Sale Marketing and Auction Services Exhibit.

The use of a Fannie Mae vendor for foreclosure auction services is optional, and the servicer must allow the law firm the discretion to choose whether to use a vendor for these services.

The Foreclosure Sale Marketing and Auction Services Exhibit sets forth complete requirements for foreclosure sale marketing and foreclosure auction services, including descriptions of each service and applicable jurisdictions.

Fannie Mae will directly pay the vendors it has engaged for any foreclosure sale marketing and foreclosure auction services assigned to them. If the servicer chooses to use a vendor for foreclosure sale-related services in a jurisdiction where Fannie Mae has not engaged the vendor, the servicer is responsible for paying the vendor.


Reporting Third-Party Sales to Fannie Mae

The servicer must report all third-party sales to Fannie Mae in accordance with E-3.5-02, Handling Third-Party Sales. The servicer must follow the instructions shown in the following table.

The servicer must...

Remove the mortgage loan from Fannie Mae’s active accounting records or the MBS pool in the reporting period for the month in which the foreclosure sale occurred, by reporting an Action Code 71 to Fannie Mae’s investor reporting system. Also see the Investor Reporting Manual.


Report the proceeds from the sale as a “special remittance.” Also see Reporting a Special Remittance in F-1-21, Remitting and Accounting to Fannie Mae.


Forward a copy of the closing statement to Fannie Mae’s SF CPM division (see F-4-03, List of Contacts) on the same day it remits the funds to Fannie Mae. The closing statement must include a breakdown of:

  • principal,

  • interest,

  • servicing fees,

  • outstanding advances, and

  • any other items to the date of sale.

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