Fannie Mae: SVC-2019-06: Servicing Guide Updates

Fannie Mae: SVC-2019-06: Servicing Guide Updates

Investor Update
September 11, 2019

Source: Fannie Mae

The Servicing Guide has been updated to include changes or clarifications related to the following:

• Foreclosure and Bankruptcy Allowable Attorney Fees*
• Miscellaneous Revisions
o Guide Updates for Maximum Servicing Fee for UMBS Loans**
o Reporting Bankruptcy Notifications to Fannie Mae**
o Document Custodian Timing Requirements for Post-Delivery Servicing Transfers

*Policy change applies only to HomeKeeper® loans and is not applicable to Home Equity Conversion Mortgage (HECM) loans.
**Policy change not applicable to reverse mortgage loans.

Foreclosure and Bankruptcy Allowable Attorney Fees
We are updating the maximum allowable foreclosure attorney fees in all jurisdictions except Maine, New Hampshire, Washington (foreclosures for e-Notes only), Hawaii, Iowa (non-judicial foreclosures), and South Dakota. We determined that fees do not need to be adjusted at this time for those states. Additionally, we are updating the following maximum allowable bankruptcy attorney fees for legal services provided on mortgage loans we own or securitize:

 Motion for Relief for Chapter 7, 11, 12, and 13 cases;
 Proof of Claim Preparation and Plan Review for Chapter 11, 12, and 13 cases;
 Objection to Plan for Chapter 12 and 13 cases; and
 Response to Final Cure Payment Notice for Chapter 13 cases.

Updated Servicing Guide Exhibits
 Allowable Foreclosure Attorney Fees
 Allowable Bankruptcy Attorney Fees

Effective Date
The allowable fee updates are effective as follows:

 The new allowable foreclosure fees apply to all matters referred to counsel for initiation of foreclosure proceedings, regardless of referral date, if the matter is still active as of September 11, 2019. Servicers are encouraged to implement the new fees for the impacted states immediately, but must do so no later than December 1, 2019.
 The new allowable bankruptcy fees apply to all legal services performed on or after December 1, 2019.

Servicers may exercise reasonable discretion in determining how to implement the changes, including working as needed with the law firm or an applicable invoicing technology provider.

Miscellaneous Revisions
Guide Updates for Maximum Servicing Fee for UMBS Loans. To support the Uniform Mortgage-Backed Securities (UMBS), we previously announced new maximum servicing fees for fixed-rate mortgage loans delivered on or after June 1, 2019 in Lender Letter LL-2019-03. We are now incorporating these changes into the following topics of the Servicing Guide:
 F-2-09, Servicing Fees for MBS Mortgage Loans
 F-2-10, Servicing Fees for Portfolio Mortgage Loans

Reporting Bankruptcy Notifications to Fannie Mae. Currently, servicers must notify us when they learn after the foreclosure sale date that a borrower has filed for bankruptcy. In response to servicers’ feedback and to resolve confusion, we have created the Bankruptcy Notification Template to clarify the information that servicers must provide to us in connection with bankruptcy filings identified after the foreclosure sale date.

Updated Servicing Guide Topics
 E-2.3-07, Responding to Bankruptcies Identified After Foreclosure Sale
 F-4-01, References to Fannie Mae’s Website
 F-4-03, List of Contacts

Effective Date
Servicers are encouraged to use the template immediately, but must do so by December 1, 2019.

Document Custodian Timing Requirements for Post-Delivery Servicing Transfers. To enable timely and accurate recertification of custodial documents, we have updated A2-7-03, Post-Delivery Servicing Transfers to require that when a post-delivery servicing transfer occurs, the transferor servicer must advise the transferor document custodian maintaining possession of the custodial documents within 30 days of the transfer effective date.

Effective Date
Servicers are encouraged to implement this change immediately, but must do so for post-delivery servicing transfers that occur on or after January 1, 2020.

Contact your Fannie Mae account team, Portfolio Manager, or Fannie Mae’s Single-Family Servicer Support Center at 1-800-2FANNIE (1-800-232-6643) with any questions regarding this Announcement.

Malloy Evans
Senior Vice President and
Chief Credit Officer for Single-Family