Fannie Mae SVC-2014-08 Miscellaneous Servicing Policy Updates
On May 21, Fannie Mae released Servicing Guide Announcement SVC-2014-08, subtitled Miscellaneous Servicing Policy Updates.
Servicing Guide Announcement SVC-2014-08
Miscellaneous Servicing Policy Updates
This Announcement describes and updates Fannie Mae policies regarding
- calculating the repurchase price,
- release of security,
- servicer oversight and business continuity requirements, and
- stay of foreclosure and other legal proceedings for servicemembers.
Unless otherwise stated, the servicer is encouraged to implement the new policies in
this Announcement immediately; however, servicers are required to implement
these policies no later than September 1, 2014.
Calculating the Repurchase Price
Servicing Guide, Part VI, Section 202: Repurchase Proceeds
Fannie Mae is clarifying its policy for calculating the repurchase price when a
mortgage loan (other than a reverse mortgage) was originally purchased at
a premium or discounted purchase price and has undergone negative
amortization. Fannie Mae will limit both the purchase discount and the
purchase premium to the amount of the original purchase discount or
premium, if applicable.
In addition, Fannie Mae is clarifying that the purchase price used to calculate the
repurchase amount is expressed as a percentage of par. If a discount was paid
at the time that Fannie Mae purchased the mortgage loan, this percentage will
be less than 100%. Conversely, the percentage will be greater than 100% if a
premium was paid at the time that Fannie Mae purchased the mortgage loan.
Release of Security
Servicing Guide, Part III, Chapter 7: Releases of Security; Section 701:
Release or Grant of a Easement; Section 702: Release of Oil, Gas,
or Mineral Rights; Section 704: Partial Release of Real Property;
Section, 705: Partition of Real Property; Section 706: Substitution
of Security; and Section 707: Condemnation or Taking by
Fannie Mae is updating the documents required to evaluate a request to release all
or a portion of the property securing a mortgage loan and revising the
Application for Release of Security (Form 236). When Fannie Mae’s approval of a
release of security is required, the servicer must submit Form 236 and all required
documents as specified on the Form 236 to Fannie Mae via email
to email@example.com. Fannie Mae will review the request and follow
up with the servicer accordingly. The servicer is no longer required to contact
their Servicing Consultant, Portfolio Manager, or Fannie Mae’s National Servicing
Organization’s Servicing Solutions Center for these approvals.
Servicer Oversight and Business Continuity Requirements
Servicing Guide, Part I, Section 202: Servicer’s Basic Duties and
Responsibilities; Section, 301.01: Servicer’s Audit and Control
Systems; and Section 307: Compliance with Applicable Laws
Fannie Mae currently requires each Fannie Mae–approved servicer (and any
subservicer or third-party originator it uses) to be aware of, and in full
compliance with, all federal, state, and local laws (including statutes,
regulations, ordinances, administrative rules and orders that have the effect
of law, and judicial rulings and opinions) that apply to any of its origination,
selling, or servicing practices or other business practices (including the use
of technology) that may have a material effect on Fannie Mae. Fannie Mae
is clarifying the servicer’s oversight responsibilities to include all outsourcing
and third-party vendors used by the servicer. The servicer must also have
policies and procedures in place to ensure that all outsourcing firms and
third-party vendors used by the servicer are fully compliant with the
requirements of the Servicing Guide (where applicable), and must perform
annual quality control tests accordingly. Test results must be provided to
Fannie Mae upon request.
Servicing Guide, Part I, Chapter 3: Maintaining Eligibility
Fannie Mae is updating the servicer’s oversight responsibilities to require all
subservicers, third-party originators, outsourcing firms and/or third party
vendors used by the servicer to implement and maintain business continuity
plans that ensure their ability to regain critical business operations in the
event of a disruption or disaster.
Additionally, the servicer must implement and maintain business continuity plan(s)
that ensure the servicer’s ability to regain critical business operations in the
event the subservicers, third-party originators, outsourcing firms, and/or third
party vendors used by the servicer fail to maintain business continuity, suffer
complete business failure, or dissolution.
All plans must be comprehensive, in a written format, accessible to critical staff,
annually tested and updated. Test results must be provided to Fannie Mae
Stay of Foreclosure and other Legal Proceedings for Servicemembers
Servicing Guide, Part III, Chapter 1, Exhibit 1: Military Indulgence; Servicing
Guide Announcement SVC-2013-10, Miscellaneous Servicing Policy Updates;
and Part IV, Section 205: Effect of Servicemembers Civil Relief Act
Fannie Mae is updating its requirements for foreclosure proceedings for active duty
The Honoring America’s Veterans and Caring for Camp Lejeune Families Act of
2012 provides for a 12-month extended stay of foreclosure and other legal
proceedings from the date on which military service ends. This extended stay
expires December 31, 2014, and effective January 1, 2015, the 12-month stay
reverts back to 90 days under the Servicemembers Civil Relief Act.
However, for Fannie Mae mortgage loans, the 12-month extended stay of
foreclosure and other legal proceedings period will remain in effect beyond
the originally communicated expiration date of December 31, 2014.
Additionally, the servicer must also stay any foreclosure proceedings that
were already in process or postpone the initiation of foreclosure
proceedings against a servicemember eligible for military indulgence. The
servicer is no longer permitted to obtain the eligible servicemember’s
written consent and/or petition the court to continue or commence
Servicers should contact their Servicing Consultant, Portfolio Manager, or Fannie
Mae’s National Servicing Organization’s Servicing Solutions Center at
1-888-FANNIE5 (1-888-326-6435) with any questions regarding this
Leslie A. Peeler
Senior Vice President
National Servicing Organization
Please click here to view the online announcement.
Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders, and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally. Website: www.safeguardproperties.com.