Servicing Guide

Published September 9, 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

Fannie Mae Single-Family Reverse Mortgage Loan Servicing Manual June 12, 2019 (Chapter 5, Processing Claims and Managing Acquired Properties)

See below for Chapter 5: Processing Claims and Managing Acquired Properties 

To see other Chapters of the Fannie Mae Single-Family Reverse Mortgage Loan Servicing Manual, please click on any of the chapters below:

Chapter 1, Reverse Mortgage Loan Products

Chapter 2, Doing Reverse Mortgage Loan Business with Fannie Mae

Chapter 3: General Servicing Requirements

Chapter 4: Assisting Borrowers At Risk of Default or In Default

Chapter 6: Reporting through eBoutique

Chapter 7: Quick Reference Materials

 

Chapter 5: Processing Claims and Managing Acquired Properties

This chapter contains the following topics:

5-01, Submitting the REOgram (12/12/2018)

The servicer must report an eBoutique Action Code 70 and submit an REOgram to the SF Credit Ops division or its delegate (see 7-03, List of Contacts) within 24 hours after the date of a foreclosure sale or the execution of a deed-in-lieu of foreclosure for all reverse mortgage loans.

  • NOTE: Fannie Mae will not accept the servicer’s REOgram until an eBoutique Action Code 70 liquidating the mortgage loan is reported.

Failure to timely submit the REOgram and report the related eBoutique Action Code may result in Fannie Mae’s

  • assessment of a $100 compensatory fee for each day it is late, and/or
  • application of any other available and appropriate remedies.

Fannie Mae will not impose a compensatory fee if it determines there is a reasonable explanation for the delay.

After the servicer submits an REOgram, it must monitor the property’s status to ensure that it files the final expense reimbursement claim in a timely manner. The servicer must refer to 2-06, Submitting Expense Reimbursement Claims for detailed requirements to submit its final expense reimbursement claim to Fannie Mae.

This topic contains information on the following:

  • Exception to Timing Requirement for Properties Located in Connecticut
  • When the Property is Subject to Resale Restrictions

Exception to Timing Requirement for Properties Located in Connecticut

If the security property is located in Connecticut and the court orders a Foreclosure by Sale, the foreclosure sale may not be approved and the conveyance deed issued until 60 or more days after the actual foreclosure sale date. Fannie Mae cannot dispose of the property until after the sale is approved, so the servicer should wait until the court approves the sale and issues the deed to Fannie Mae, and then submit the REOgram to notify Fannie Mae about the property acquisition. The REOgram must then be sent within 24 hours after the servicer learns the foreclosure sale has been approved.

When the Property Is Subject to Resale Restrictions

With respect to all resale restrictions, the servicer represents and warrants that upon transfer of the property to Fannie Mae,

  • all required notices have been given in an appropriate manner, and
  • the foreclosure (or deed-in-lieu of foreclosure) complies with the requirements of the applicable resale restrictions.

The servicer must indicate on the REOgram if the property is subject to resale restrictions that survive foreclosure or the acceptance of a deed-in-lieu of foreclosure.

If the resale restrictions do not survive foreclosure (or the expiration of any applicable redemption period) or acceptance of a deed-in-lieu of foreclosure, the servicer represents and warrants that all actions necessary for the resale restrictions to terminate have been taken.

5-02, Home Equity Conversion Mortgage Loan-Specific Mortgage Insurance Claim Requirements (04/11/2018)

Generally, Fannie Mae is able to source reverse mortgage loan claim documentation directly from HUD’s HERMIT system in an effort to reduce the amount of documentation the servicer must provide when submitting reimbursement claims. However, there are specific situations in which the servicer is required to provide all of the claim documentation to Fannie Mae. 

If the HUD claim…

Then the servicer must submit a copy of the…

is paper-based (i.e., not filed in HERMIT)

original HUD claim and any supplemental claim forms to Fannie Mae within five business days of filing the claim.

is determined to be an assignment claim (also known as a type 22 claim)

HUD claim and AOP to Fannie Mae within five business days of filing the claim.

is determined to be a profit claim (also known as a negative claim)

HECM claims worksheet within five business days of a negative claim identification.

The servicer must provide any other documentation to Fannie Mae upon request.

All claim documentation must be remitted to Fannie Mae utilizing the FTP link in Fannie Mae’s servicing solutions system.

  • NOTE: Servicers that are not yet set up to utilize the FTP must contact HECM Billing (see 7-03, List of Contacts) for assistance.

Refer to the Servicing Guide E-4.5-02, Filing MI Claims for FHA Mortgage Loans for additional information on filing claims for FHA mortgage loans.

5-03, Acquired Properties (05/28/2014)

When a property that secures any reverse mortgage loan is acquired by foreclosure or acceptance of a deed-in-lieu and it cannot be conveyed to the insurer or guarantor, Fannie Mae will be responsible for all functions related to the disposition of the property once the servicer notifies Fannie Mae of the property acquisition.

Fannie Mae also may require the servicer to purchase an acquired property that is not marketable because the servicer failed to detect and correct a title deficiency—particularly when Fannie Mae has lost a sale, Fannie Mae is experiencing significant delays in marketing the property, or Fannie Mae has identified that the servicer’s performance shows a pattern of deficiencies.

5-04, Property Management (09/18/2018)

Once Fannie Mae receives the REOgram notifying Fannie Mae about a property acquisition, Fannie Mae will designate a broker, agent, or property management company to oversee certain property management responsibilities and assume responsibility for the payment of HOA, condo association or co-op corporation fees and assessments, ground rents and property taxes.

The servicer must ensure the deed is recorded so that the tax rolls will be changed to reflect Fannie Mae's ownership of the property. However, the servicer is not responsible for the payment of any additional HOA, condo association or co-op corporation fees and assessments, ground rents or real property taxes after Fannie Mae acquires the property, unless otherwise instructed by Fannie Mae.

Under certain circumstances, Fannie Mae also may request the servicer to perform some property management functions that usually would be assigned to a broker, agent, or property management company. However, all repair and marketing costs involved in the disposition of the property must be approved by Fannie Mae.

The following table describes the property insurance requirements for Home Keeper and HECM loans following foreclosure or execution of a deed-in-lieu of foreclosure.

For…

The servicer must…

Home Keeper mortgage loans

  • ensure Fannie Mae is named on the property insurance policy
  • continue to advance funds to pay for insurance premiums, and maintain property insurance coverage until the property appears on the Vacancy Report in Home Tracker®, and
  • follow the requirements for conventional first lien mortgage loans related to the cancelation of property insurance coverage once the property appears on the Vacancy Report in Home Tracking found in Servicing Guide E-4.4-01, Continuing or Canceling Poperty Insurance Coverage.

HECMs

  • cancel the property insurance policy upon foreclosure sale or execution of a deed-in-lieu of foreclosure,

NOTE: If the insurance carrier is not willing to cancel the policy because Fannie Mae is not the named insured, the servicer must first request cancellation of Fannie Mae’s mortgagee interest and removal of its name from the policy before requesting cancellation of the property insurance policy.

  • place a property insurance policy on the acquired property (“REO hazard insurance”) in accordance with HUD guidelines and up to the HUD foreclosure appraisal or deed-in-lieu property valuation amount, as applicable,

NOTE: In the event the servicer is unable to obtain a property valuation due to circumstances outside its control, it must place a property insurance policy on the acquired property in accordance with HUD guidelines and up to the UPB amount.

  • provide all requested documentation and copies of property insurance proceed checks to Fannie Mae or its delegate for filing of property insurance claims,
  • request reimbursement from Fannie Mae for REO property insurance premiums via LoanSphere,
  • ensure that REO property insurance premium invoices are included in the HUD claim package in accordance with HUD guidelines, and
  • cancel the REO property insurance policy within 14 days of receipt of the HUD claim package from Fannie Mae or its delegate.

NOTE: The servicer is authorized to add HECM REO property insurance to its existing REO insurance policy as long as such policy is consistent with HUD guidelines. Additionally, Fannie Mae will maintain liability insurance on acquired properties.

 

Fannie Mae or its delegate may contact the servicer to obtain information about any applicable property insurance policy and carrier(s) and any recent property inspections completed by the servicer. The servicer must provide all requested information or documentation to Fannie Mae or its delegate within three business days.

If the servicer cancels the insurance policy prematurely and damages are later found, the servicer must make Fannie Mae whole for any losses or fees relating to the property damages.

  • NOTE: The servicer cannot issue any insurance loss proceeds to pay fees to its property recovery firm or any other servicer expenses, and Fannie Mae will not reimburse fees for any property recovery firm engaged by the servicer or for any other related servicer expenses.

The servicer must not submit a request for reimbursement of the REO property insurance premium until expiration or cancellation of the policy, as applicable.

The servicer must refer to 5-05, Submitting Special Remittances (04/11/2018) for detailed requirements to remit insurance loss proceeds to Fannie Mae.

5-05, Submitting Special Remittances (04/11/2018)

The servicer must report special remittances for reverse mortgage loans to Fannie Mae through the CRS.

The following table describes the servicer’s responsibilities related to remitting any insurance loss proceeds it receives.

The servicer must…

 

Remit to Fannie Mae the remaining balance of any insurance loss proceeds that the servicer is maintaining on a mortgage loan that is liquidated through foreclosure or execution of a deed-in-lieu within 30 days of issuing the REOgram.                    

 

Wire any funds received from any insurance loss proceeds that was a result of a claim filed by Fannie Mae’s property recovery firm to Fannie Mae within 10 business days of receipt.

 

When the servicer receives the refund of the unearned REO property insurance premium from the property insurer, it must immediately remit the funds to Fannie Mae as a special remittance via CRS. However, if Fannie Mae has not reimbursed the servicer for all of its outstanding foreclosure expenses, the servicer may keep the REO property insurance premium refund and show it as a credit on the request for expense reimbursement that it submits to request reimbursement of its outstanding expenses for the mortgage loan.

  • NOTE: This does not pertain to property insurance proceeds, but only premium refunds.

In the event of a third-party sale, the servicer must remit the amount Fannie Mae is due as a special remittance via CRS within five business days of receipt of the proceeds, using remittance code 311.  The servicer must not net expenses from the third-party proceeds prior to remittance via CRS.

 

To see other Chapters of the Fannie Mae Single-Family Reverse Mortgage Loan Servicing Manual, please click on any of the chapters below:

Chapter 1, Reverse Mortgage Loan Products

Chapter 2, Doing Reverse Mortgage Loan Business with Fannie Mae

Chapter 3: General Servicing Requirements

Chapter 4: Assisting Borrowers At Risk of Default or In Default

Chapter 6: Reporting through eBoutique

Chapter 7: Quick Reference Materials

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.