Servicing Guide

Published September 9, 2020

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APPEAL AND INDEPENDENT DISPUTE RESOLUTION PROCESSES- Part A (08/17/2016)

 

Section 1.0 Appeal Process

A lender may submit a written appeal of a demand from Fannie Mae by following the steps described in this table.

N O T E : The lender may provide a correction of an alleged defect at any time during the appeal process. 

Appeal Process

Lender Action

Fannie Mae Action

First appeal

The lender must submit a written appeal within 60 days of receiving a demand from Fannie Mae. The appeal must contain all supporting documentation related to the appeal at one time in one consolidated case file package, and identify in the appeal the section of the Guide and/or Lender Contract that supports the appeal.

Fannie Mae may identify a shorter or longer appeal period in the demand based on circumstances at the time.

Note: Written notification of a lender’s intention to submit a complete appeal package at some future date does not satisfy the submission requirement.

If Fannie Mae receives no written appeal within the 60- day period, it will be assumed that the lender does not contest the demand, and the lender will have no further right to challenge the demand or to continue with the impasse, management escalation, or IDR processes.

 

If the first appeal is denied by Fannie Mae and… Then...

the lender has no additional material documentation or information to submit for a second appeal

the lender must either

  • initiate the impasseprocess within 15 days(described below), or
  • comply with the demand.

the lender has additional material information

the lender may submit a second appeal as outlined below.

Complying with the demand may involve:

 

Fannie Mae must respond to the lender’s written appeal within 60 days of its receipt.

 

If Fannie Mae fails to respond within 60 days of receipt of the lender’s appeal, Fannie Mae will have no further right to seek a remedy of the breach(es) identified in the demand, other than seeking indemnification for any third-party claims.

 

Appeal Process

Lender Action

Fannie Mae Action

 

  • completing the repurchase of the mortgage loan or property;
  • submitting the indemnification or make whole payment;
  • executing any agreement required by an accepted repurchase alternative; or
  • if the repurchase involves an active mortgage loan that will be involved in a servicing transfer, notifying Fannie Mae of the name of the new servicer and the date of the servicing transfer.

 

Second appeal

The lender must submit a second appeal within 15 days of receiving a denial of the first appeal if it wants to challenge the existence of the defect in the demand.

Fannie Mae must respond to the lender’s second written appeal within 60 days of its receipt.

If Fannie Mae fails to respond within 60 days, Fannie Mae will have no further right to seek a remedy of the breach(es) identified in the demand,

other than seeking indemnification for any third-party claims.

Section 2.0 Impasse and Management Escalation Processes

The steps in the impasse and management escalation processes for demands are described in the following table.

N O T E : The lender may provide a correction of a defect at any time during the impasse process in accordance with the Guides. No new information, facts, documents, or corrections may be submitted during the management escalation process.

 

Impasse and Management Escalation Processes

Lender Action

Fannie Mae Action

or Further Action by the Parties

Impasse Process

At the conclusion of the first or second appeal, if the lender wants to challenge the existence of the defect in the demand, it must initiate the impasse process in writing to Fannie Mae (which can include electronic submissions) within 15 days of receiving Fannie Mae’s denial of the first or second appeal.

 

Note: If Fannie Mae receives no written request for impasse within the 15-day period following Fannie Mae’s denial, the lender will have no further right to challenge the

Fannie Mae and the lender will have 30 days in which to attempt to resolve the dispute, unless both parties agree to a longer period of time.

Note: All information, facts, and documents that the lender or Fannie Mae want to be considered in any subsequent IDR process must be submitted to the other party no later than the end of the impasse period or such

 

 

 

existence of the defect identified in the demand or continue with the impasse, management escalation, or IDR processes.

information will not be considered in a subsequent IDR proceeding.

At the conclusion of the impasse process, if the lender and Fannie Mae reach agreement, then within 30 days:

  • Fannie Mae will rescind or withdraw the demand, or
  • the lender must implement the agreed- upon remedy.

Management Escalation Process

At the conclusion of the impasse process, if Fannie Mae has reaffirmed the demand and the lender wants to continue to challenge the existence of the defect in the demand, it must initiate the management escalation process in writing (which can include electronic submissions) within 15 days after conclusion of the impasse process by notifying its Fannie Mae officer contact that it wants to initiate management escalation.

 

Note: If Fannie Mae receives no written request for management escalation within the 15-day period following the impasse process, the lender will have no further right to challenge the demand and will be obligated to comply with its terms.

If, at the end of the management escalation process, Fannie Mae has reaffirmed the demand, the lender may initiate the IDR process.

Within 30 days of receipt of the lender’s initiation of the management escalation process, Fannie Mae must involve its designated officer in a review of the dispute.

Fannie Mae and the lender will have 30 days in which to attempt to resolve the dispute, unless both parties agree to a longer period of time. If the lender and Fannie Mae reach agreement then within 30 days:

  • Fannie Mae will rescind or withdraw the demand, or
  • the lender must implement the agreed-upon remedy.

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