D1-4.1-01, Determining Whether a Transfer of Ownership Is Permitted (11/12/2014)

Introduction

This topic contains information on determining whether a transfer of ownership is permitted.

For purposes of enforcing the due-on-sale (or due-on-transfer) provision, if any, in the security instrument, the servicer must consider all of the following situations to be a transfer of ownership:

the purchase of a property “subject to” the mortgage loan,
the assumption of the mortgage loan debt by the property purchaser,
any exchange of possession of property under a land sales contract or any other land trust device, and
in cases in which an inter vivos revocable trust is the borrower, any transfer of a beneficial interest in the trust.

When the servicer receives a request for a statement of account in connection with a possible transfer of ownership of a property, or if the servicer learns after the fact that a transfer has occurred, the servicer must take the actions listed in the following table.

✓	The servicer must...
	Review the mortgage loan instruments to determine whether the mortgage loan is subject to enforcement of the due-on-sale (or due-on-transfer) provision.
	Investigate any questionable changes to determine whether a transfer of ownership has occurred.
	Determine whether any action needs to be taken to enforce the due-on-sale (or due-on-transfer) provision.

The statement of account that the servicer issues in connection with a possible transfer must clearly state the items listed in the following table.

✓	The statement of account must clearly...
	State Fannie Mae’s right to enforce the due-on-sale (or due-on-transfer) provision, if applicable.
	Describe Fannie Mae’s policy regarding enforcement of due-on-sale (or due-on-transfer) provisions.
	Describe any exceptions or limiting conditions to the policy.