Servicing Guide

Published September 9, 2020

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How should a servicer process a transfer of ownership subject to state law restrictions?

The servicer must process any transfer of ownership in accordance with Chapter D1-4, Transfers of Ownership.   

A Transfer Subject to State Law Restrictions

The servicer must process the transfer of ownership as described in the following table. The servicer must include a release of liability provision in the transfer instruments if the borrower requested a release of liability and the mortgage insurer agreed to it.

If... Then...

Fannie Mae is the owner of record for the mortgage loan

the servicer must either

  • execute the appropriate transfer documents on Fannie Mae’s behalf if it has an assignment of mortgage

    • an assumption agreement if there is no change in the interest rate, or

    • a mortgage loan modification and assumption agreement if the interest rate changes; or

  • prepare the assignment of mortgage and send it to Fannie Mae’s SF CPM division (see F-4-03, List of Contacts) for execution.

    Note: Once Fannie Mae returns the executed assignment of mortgage to the servicer, the servicer is authorized to execute the assumption agreement and must send the original recorded assumption agreement to its document custodian.

the servicer is the owner of record for the mortgage loan

  • the servicer is authorized to execute the appropriate documents, and

  • the servicer must send a copy of the recorded agreement to its document custodian.

Regardless of the owner of record for the mortgage loan, the servicer must have the executed transfer documents recorded and should request a title bring-down from the title insurer. The bring-down must

  • change the effective date of the mortgage title policy to the date the transfer instruments were recorded, and

  • insure the mortgage loan as modified by the recorded agreement.

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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