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E-4.1-02, Eliminations and Rescissions of Foreclosure Sales (07/14/2021)

This topic contains the following:

General Requirements for Eliminations and Rescissions of Foreclosure Sales

This topic contains Fannie Mae’s requirements for eliminations and rescissions of foreclosure sales. “Elimination” is the process of removing a property from Fannie Mae’s REO inventory system of record. “Foreclosure Sale Rescission” is the legal process of reversing a foreclosure sale and removing Fannie Mae as titleholder to the property. There are circumstances in which a foreclosure sale rescission may not involve elimination. However, if an REOgram has been confirmed with an associated foreclosure sale, an elimination will also be necessary.

When the servicer identifies an issue that requires an elimination and/or rescission of the foreclosure sale, the servicer must submit a request for elimination and/or rescission within five days.

To submit a request for elimination and/or rescission, the servicer must complete and submit the Elimination/Rescission Request Template.

When Fannie Mae identifies an issue that requires a property to be eliminated from its REO inventory or a foreclosure sale to be rescinded, Fannie Mae will initiate the elimination and/or rescission process.

The servicer must access the Eliminations/Rescissions Daily Report on Fannie Mae Connect. The servicer must complete the actions listed in the following table.

The servicer must...

Review the Elimination/Rescissions Daily Report for notification of servicer-requested elimination/rescission approvals and Fannie Mae-initiated eliminations/rescissions.


Add each eliminated file back into its servicer system within 24 hours of notification of approval or notification that the file has been eliminated by Fannie Mae.


Resume managing the eliminated/rescinded file pursuant to the Servicing Guide.


Work with the law firm that handled the foreclosure to ensure that any necessary activities to complete the elimination and/or rescission are coordinated in a timely fashion.

If a new foreclosure sale takes place or other actions are taken to validate the foreclosure sale, a new REOgram must be confirmed in accordance with Timing of the REOgram in  E-4.1-01, Notifying Fannie Mae of an Acquired PropertyE-4.1-01, Notifying Fannie Mae of an Acquired Property.

Upon elimination and/or rescission of the foreclosure sale, the servicer is responsible for transferring title into the appropriate party’s name and removing Fannie Mae from title in accordance with Correcting Conveyances to Fannie Mae in A2-1-04, Execution of Legal DocumentsA2-1-04, Execution of Legal Documents. The servicer must initiate any required steps to restore title to the appropriate party within two days of the elimination and/or rescission notification. The servicer, however, must adhere to specific local and state law recordation requirements, as applicable.

Compensatory Fees for Foreclosure Rescissions

Fannie Mae may assess the servicer a compensatory fee for any failure to follow Fannie Mae guidelines or other servicing error or alleged error that results in a rescission of a foreclosure sale. Fannie Mae will not reimburse foreclosure fees and costs that are required to complete a new foreclosure following rescission. See A1-4.2-02, Compensatory Fees for Delays in the Liquidation ProcessA1-4.2-02, Compensatory Fees for Delays in the Liquidation Process for additional information on compensatory fees.

Recent Related Announcements

The table below provides references to recently issued Announcements that are related to this topic.  

Announcements Issue Date
Announcement SVC-2021-04 July 14, 2021
Announcement SVC-2019-03 May 15, 2019