Servicing Guide

Published November 10, 2020

For best results, pose your search like a question.

Guide Resources

For a comprehensive list of resources such as forms, announcements, lender letters, notices and more.

Visit Selling and Servicing Guide Communications and Forms

Customers Recommend Ask Poli

AskPoli

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

Launch Ask Poli  

Download PDF Guide

You can also download the printable ~800 page PDF, which include links.

Download Now

How should a servicer process a transfer of ownership for a non-exempt transaction with an exception due to the loan type and creditworthy purchaser?

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

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 agreement if the borrower requested a release of liability and the mortgage insurer agreed to it.

If... Then the servicer must...

Fannie Mae is the owner of record for the mortgage loan

  • prepare an assumption and release agreement and either

    • execute the agreement on Fannie Mae’s behalf if it has an assignment of mortgage, 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 a copy of the recorded assumption agreement to its document custodian.

the servicer is the owner of record for the mortgage loan

  • execute the assumption (and release) agreement,

  • record the executed transfer documents,

  • send the original recorded assumption (and release) agreement to its document custodian, and

  • instruct its Fannie Mae investor reporting system representative to change Fannie Mae’s accounting records to reflect the addition of this lifetime interest rate change limitation.

 

Note: When the transfer of ownership involves an ARM that does not include a lifetime interest rate change limitation in its terms, the servicer must include the following language in the assumption (and release) agreement:

“The interest rate I am required to pay after I assume this mortgage obligation and for the entire term of this mortgage loan will never be greater than __ percent.”

In addition, if the mortgage loan is convertible to a fixed-rate mortgage loan, the servicer also must include the following sentence:

“This limitation also applies if I exercise my option to convert to a fixed-rate mortgage loan.”

To determine the appropriate interest rate to insert in this provision, the servicer should add 6% to the sum of the mortgage margin and the index that is in effect on the date that the assumption statement is prepared. If the transaction has not closed within 30 days, the servicer should establish a new rate based on the latest available index.


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

Have You Tried Ask Poli?

Poli knows. Just ask.

Ask Poli features exclusive Q&As and
more—plus official Selling & Servicing
Guide
content.

Try Ask Poli

Related Articles


AskPoli

Customers Recommend Ask Poli

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

Guide Resources

For a comprehensive list of resources such as access forms, announcements, lender letters, notices and more.

Visit Selling and Servicing Guide Communications and Forms

X
Having Issues with Seeing this Page Correctly?

Use Firefox or Chrome   How to do a hard refresh in Internet Explorer
We recommend that you use the latest version of FireFox or Chrome.

Download Firefox
Download Chrome
  A hard refresh will clear the browsers cache for a specific page and force the most recent version of a page.
    Hold the Ctrl key and press the F5 key.
     

Email Us
If you still have Technical Support questions, feel free to emailAsk_Poli@fanniemae.com.