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A2-3-05, Fees for Certain Servicing Activities (11/08/2017)

Introduction
This topic contains the following:

Prohibited Fees for Servicing

The servicer is not authorized to charge the borrower fees relating to the following activities:

  • handling borrower disputes;

  • facilitating routine borrower collections;

  • arranging repayment or forbearance plans;

  • sending borrowers notices (sometimes called “demand” or “breach” letters) relating to nonpayment of principal, interest, taxes, or insurance in advance of a formal acceleration notice that matures the mortgage loan principal balance and begins the foreclosure process; and

  • updating the servicer’s records to “reinstate” a mortgage loan that has been brought current.

Allowable Fees for Servicing

The servicing fee generally is not intended to encompass certain additional work that the servicer performs at the borrower’s request or on the borrower’s behalf, including but not limited to:

  • a change in ownership of the security property,

  • replacement of insurance policies,

  • a release or partial release of security,

  • providing expedited service via fax,

  • providing more than one payoff statement in a short period of time (or even a single payoff statement if applicable law expressly permits a borrower fee),

  • providing duplicate copies of mortgage loan documents,

  • accepting a “phone pay” payment, and

  • consummating the assumption of a mortgage loan.

Additional Fee Assessment Guidelines

The following table describes additional fee assessment guidelines based on activities for ARM loan adjustments or assumptions.

For… The servicer…

ARM loan adjustments

may not charge fees for the interest rate or payment changes that are required periodically for ARM loans, although it may charge a processing fee to cover the administrative costs of converting an ARM loan to a fixed-rate mortgage loan, limited to $100 for most ARM plans or $250 for ARM plans that include a monthly conversion option.

transfers of ownership, assumptions, and releases of liability of conventional mortgage loans

must limit the assumption fee, although out-of-pocket expenses for processing the transaction —such as the cost of the credit report —may be charged at actual cost. Fannie Mae considers the following fee schedule to be reasonable; however, if the servicer’s costs do not warrant these fees, it should charge lower fees:

  • $100 if the transfer of ownership does not require a review of the purchaser’s (transferee) credit, or

  • the greater of $400 or 1% of the UPB of the mortgage loan —up to a maximum of $900 —if the transfer of ownership requires credit approval of the transferee or a release of liability is requested.

The servicer must advise Fannie Mae of any fees it collects for a transfer of ownership as part of the monthly activity information it provides through the Fannie Mae investor reporting system.

assumptions of FHA or VA mortgage loans

must follow FHA or VA requirements regarding the maximum allowable assumption fees for these government mortgage loans.
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