Servicing Guide

Published September 9, 2020

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What action should be taken if we become aware of a property transfer through a grant deed?

The servicer must evaluate all transfers of ownership as required in Chapter D1-4, Transfers of Ownership. When the servicer becomes aware of a property transfer through Grant Deed, it must complete the actions shown in the following table.

The servicer must…
 

Continue to report credit information related to a mortgage loan delinquency (including the acceptance of a Mortgage Release or the initiation of foreclosure proceedings) to credit bureaus in the borrower’s name.

 

Determine that the title to the property is clear and marketable (by obtaining a title bring-down).

 

File an Acquisition or Abandonment of Secured Property (IRS Form 1099-A) if it accepts a Mortgage Release or acquires title to the property through foreclosure, using the borrower’s name and social security number (rather than a third-party company’s name and tax identification number). The servicer should not file a Cancellation of Debt (IRS Form 1099-C) since no debt is being canceled because Fannie Mae will not accept a short payoff from the third-party company and will continue to hold the borrower liable.

For more information please see F-1-18, Processing a Transfer of Ownership.

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If you have additional questions, Fannie Mae customers can visit Ask Poli to get information from other Fannie Mae published sources.

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