Fannie Mae Announces Servicing Revisions for Execution of Legal Documents
by: Anna DeSimone
On April 17, 3013 Fannie Mae issued Servicing Announcement 2013-09, Execution of Legal Documents. The agency is revising several aspects of its execution of legal documents policy. This Announcement addresses policy changes related to:
Quitclaim deeds
Limited power of attorney
Execution of assumptions
Releases of security
Executing legal documents
Effective Date: Servicers are required to implement the policies in this Announcement immediately.
Quitclaim Deeds. Fannie Mae is issuing new guidance related to quitclaim deeds for properties that have been conveyed in error to Fannie Mae. The servicer must comply with the requirements when preparing a reconveyance quitclaim deed that are outlined in Announcement and in the Servicing Guide, Part I, Section 202.06: Execution of Legal Documents.
Execution of Assumptions. Fannie Mae is revising guidance regarding execution of assumptions. If Fannie Mae is the owner of record (or mortgagee of record, as applicable) for the mortgage loan, the servicer must have an assignment of mortgage to execute the assumption agreement. If the servicer does not have an assignment of mortgage, it must prepare the assignment of mortgage and send it to Fannie Mae for execution. Fannie Mae will return the executed assignment of mortgage to the servicer, and the servicer must then record the executed assumption agreement and send a copy of the recorded assumption agreement to its document custodian.
Releases of Security. If the servicer is required to submit the borrower’s Application for Release of Security, along with the servicer’s recommendation, to approve the release of security on its behalf, it must submit the borrower’s application to Fannie Mae’s Loss Mitigation department for approval. Servicers must direct certain inquiries related to the following activities to the Loss Mitigation department, as outlined in the Announcement.
Executing Legal Documents. Effective immediately, servicers with limited power of attorney must seek approval from Fannie Mae’s Loss Mitigation department to receive documents for any release of security required to be approved by Fannie Mae prior to execution. Servicers must not send any legal documents for execution to Fannie Mae’s regional offices. Fannie Mae is also removing its Designated Document Custodian as the point of contact for releases of security and its Vendor Oversight group as the recipient of legal documents. Details are explained in Part III, Section 709: Executing Legal Documentation.
About the Author:
Anna DeSimone is President and Founder of Bankers Advisory, Inc. She can be reached at anna@bankersadvisory.com
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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