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E-3.2-11, Collecting Under an Assignment of Rents (08/12/2015)

The servicer must determine whether it is appropriate to pursue collections under the assignment of rents provision, taking into consideration mortgage insurer or guarantor requirements.

If the servicer pursues collections under an assignment of rents provision, it must ensure

  • local law allows the mortgagee to collect rents under these circumstances, and

  • this action will not create any new rights for the occupant that might impair Fannie Mae’s ability to foreclose the mortgage loan at a later date.

Rental income that is collected on a delinquent mortgage loan must be applied in accordance with the terms of the note and security instrument.

The following table provides the servicer with instructions when the mortgage loan is in foreclosure and the servicer is already collecting rental income.

The servicer must…

Hold any rental income it receives as unapplied funds until the mortgage loan is liquidated.


Keep a record of rental income collections and disbursements so that they can be considered when the final claim under the MI or guaranty is filed.


Remit Fannie Mae's share of the rental income to Fannie Mae or deduct it from the amount due to reimburse the servicer for any advances it made.

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