Default-Related Legal Services | Fannie Mae Servicing Guide Announcement SVC-2012-22

Servicing Guide Announcement SVC-2012-22

Default-Related Legal Services

Fannie Mae is announcing new servicer requirements with respect to default-related legal services, which include foreclosure, loss mitigation (for example, deeds-in-lieu of foreclosure), bankruptcy, and related litigation, in connection with single-family mortgage loans owned or securitized by Fannie Mae. These new requirements are being implemented pursuant to the Federal Housing Finance Agency’s (FHFA) October 2011 directive to Fannie Mae and Freddie Mac to phase out their existing attorney networks and to adopt consistent requirements, policies, and processes for managing default-related legal services.
This Announcement applies to default-related legal services in connection with all conventional or government single-family mortgage loans held in Fannie Mae’s portfolio and MBS pool mortgage loans guaranteed by Fannie Mae.
The policies described in this Announcement will be added as new subsections to the Servicing Guide in Part III, Chapter 5: Notices of Liens or Legal Actions; Part VII, Chapter 5: Bankruptcy Proceedings; and Part VIII, Chapter 1: Foreclosures and Chapter 3: Acquired Properties. Fannie Mae is replacing the following sections of the Servicing Guide with the new policies outlined in this Announcement:

Part III, Section 501: Uncontested Routine Legal Actions

Part III, Section 502: Contested Routine Legal Actions

Part III, Section 503: Nonroutine Legal Actions

Part VII, Section 501: Selection of Bankruptcy Attorneys and Avoiding Delays in Case Processing

Part VII, Section 501.01: Fannie Mae-Retained Attorneys

Part VII, Section 501.02: Servicer-Retained Bankruptcy Attorneys

Part VIII, Section 101: Routine vs. Non-Routine Litigation

Part VIII, Section 106: Referral to Foreclosure Attorney/Trustee

Part VIII, Section 106.01: Fannie Mae-Retained Attorneys

Part VIII, Section 106.02: Special Rules for Arizona, California, and Washington Foreclosures

Part VIII, Section 106.03: Servicer-Retained Attorneys/Trustees and Special Rules for Nevada

Part VIII, Section 107.04: Bankruptcy Referrals
Unless otherwise noted, the Servicing Guide sections referenced in the body of this Announcement (and that are not included in the list above) remain in full force and effect. Several policies in this Announcement are consistent with current guidance and are reiterated here as a reminder to servicers.
This Announcement covers the following topics:

Effective Date

Law Firm Selection and Retention

Law Firm Management and Oversight

Notices of Liens or Legal Actions

Effect of Environmental Hazards

Foreclosure and Bankruptcy Attorney Fees

Eviction Proceedings

Special Counsel Retained by Servicers Pursuant to Duty to Indemnify Fannie Mae

Law Firm Suspensions, Matter Transfers, and Terminations

Materials to Assist Servicers with Implementation

Copy of the guidelines below…

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4closureFraud.org

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Fannie Mae Servicing Guide Announcement SVC-2012-22

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