A2-3-01, Servicer Compensation (12/14/2016)

Servicing fees are payable to the servicer from the time Fannie Mae purchases or securitizes a mortgage loan until it is liquidated (or otherwise removed from an MBS pool or Fannie Mae’s active accounting records), as long as the servicer collects or remits the mortgage loan payments.

As compensation for servicing mortgage loans for Fannie Mae, Fannie Mae pays the servicer servicing fees and allows it to retain the following:

• late charges,

• fees charged for certain servicing activities,

• yield differential adjustments, and

• in some cases, either a share or all of any applicable prepayment premiums that Fannie Mae permits under the terms of a negotiated contract. 

As described in the Lender Contract, the servicer bears the cost of servicing mortgage loans sold to Fannie Mae, except as expressly provided otherwise in Fannie Mae’s Guides. The servicing fee that Fannie Mae pays the servicer and the other revenue sources consistent with the Guides are intended to compensate the servicer for a variety of standard activities associated with the servicing of mortgage loans.

The servicer may not sell, assign, transfer, pledge, or hypothecate its servicing compensation (or any portion of it) or enter into any agreement that would result in the sale, assignment, transfer, pledge, or hypothecation of that income or its servicing rights, except under the conditions and circumstances specified in  A2-7-02, Pledge of Servicing Rights and Transfer of Interest in Servicing IncomeA2-7-02, Pledge of Servicing Rights and Transfer of Interest in Servicing Income.

The exact servicing fee that applies to any given mortgage loan appears on the trial balance report that is produced by Fannie Mae’s investor reporting system (see the Investor Reporting Manual).

Because servicing fees are computed on the same UPB and for the same period as the interest portion of the monthly installment, the servicer generally can base its servicing fee calculation on the interest collected. However, when a mortgage loan is undergoing negative amortization, servicing fees must be based on the interest amount that is accrued, rather than on the amount that was actually collected.

For mortgage loans where military indulgence is warranted or required under the SCRA, see  D2-3.4-01, Military IndulgenceD2-3.4-01, Military Indulgence, for the calculation of servicing fees.

The servicer is authorized to obtain its servicing fee compensation by way of the methods in the following table.

Depending on the type of mortgage loan, the servicer is authorized to retain additional servicing compensation as described in the following table.