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E-3.2-14, Addressing Title Defects for Bifurcated Mortgage Loans (08/17/2016)

The following table provides a list of servicer responsibilities related to correcting title defects for bifurcated mortgage loans.

The servicer must…

Promptly notify the responsible party when it is notified or becomes aware of an origination or servicing title defect and the selling representations and warranties or prior servicer obligations were not assumed by the servicer.


Contact Fannie Mae’s LQC Digital Data Control Team (see F-4-02, List of ContactsF-4-02, List of Contacts) if it needs confirmation of the responsible party.


Cooperate with the responsible party and take reasonable steps to correct an origination title defect.

The servicer need not take actions or advance any funds that would not be approved by Fannie Mae unless the responsible party separately agrees to reimburse the servicer for such amounts in attempting to correct the title defect on the bifurcated mortgage loan in the manner suggested by the responsible party. Fannie Mae reserves the right, at its option, to pursue other remedies as set forth in the Guides.

Fannie Mae reserves the right to require the responsible party to repurchase a mortgage loan if the originating or prior servicer created a title defect that is not resolved to Fannie Mae's satisfaction within the time frame and in the manner identified by us in the demand for a servicing repurchase remedy.

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