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A4-1-03, Addressing Borrower Inquiries and Disputes (12/20/2023)

Introduction
This topic contains the following:

Addressing Borrower Inquiries and Disputes for All Mortgage Loans

The servicer must comply with the requirements outlined in the following table when responding to borrower inquiries and disputes.

✓ The servicer must…
 

Promptly respond to all inquiries, especially in the event of a borrower dispute, about the following:

  • the terms of their mortgage loan,

  • the status of their account, or

  • any actions the servicer took or did not take in servicing their mortgage loan.
 

Ensure all processes to respond to borrower inquiries and resolve allegations of servicer errors asserted by borrowers are compliant with applicable law, including timelines for responding to borrowers and any applicable prohibitions on foreclosure referral or foreclosure sale.
 

Ensure borrowers have an effective means to communicate with the servicer to facilitate resolution of the dispute and resolve disputes without imposing unnecessary additional fees on borrowers.
 

Not commence foreclosure proceedings without a thorough review of the circumstances surrounding an ongoing dispute and reasonable efforts to resolve the dispute.

The following table describes the information the servicer must provide the borrower when the borrower makes an inquiry in writing to determine the owner or assignee of their mortgage loan.

If the mortgage loan is… Then the servicer must…

a portfolio mortgage loan

  • indicate the owner of the mortgage loan as “Fannie Mae”;

  • provide the owner contact address of Midtown Center, 1100 15th Street, NW, Washington, DC 20005; and

  • provide the contact number of the owner as 1-800-2FANNIE (1-800-232-6643).

MBS mortgage loan

  • indicate the owner of the mortgage loan as “Fannie Mae in its capacity as Trustee”;

  • provide the owner contact address of Midtown Center, 1100 15th Street, NW, Washington, DC 20005;

  • provide the contact number of the owner as 1-800-2FANNIE (1-800-232-6643); and

If the borrower requests the number of the trust or pool the servicer must provide the six-digit pool number as the Trust identifier including as applicable:

  • the Fannie Mae Trust identifier for structured deals is the designated trust name (e.g.,Fannie Mae REMIC Trust 2005-W2); and the Fannie Mae Trust identifier for structured deals is the designated trust name (e.g.,Fannie Mae REMIC Trust 2005-W2); and

  • the Fannie Mae contact number above for the related Trust identifier for mortgage loans in PFP pools.

Note: The six-digit MBS pool number appears in Fannie Mae’s investor reporting system application.

The servicer must indicate in its communication to borrowers that the owner status of their loan is based upon the servicer’s review of its records as of a date certain and that loan ownership status may change from time to time.

Managing Texas Section 50(a)(6) Loans

The servicer of a Texas Section 50(a)(6) loan must comply with the requirements in the following table.

✓ The servicer must…
 

Have adequate procedures to receive and timely respond to borrower inquiries, claims of defects, and other complaints.
 

Have processes and procedures in place to timely cure any failures to comply with applicable law.

If the servicer receives notification of failure to comply with respect to a Fannie Mae Texas Section 50(a)(6) loan, it must immediately notify Fannie Mae’s Legal department by submitting a Non-Routine Litigation Form (Form 20) and, if the notification is in writing, provide Fannie Mae with a copy of the notification.

The servicer’s failure to cure within 60 days after being notified of a failure to comply may, under Texas law, result in the forfeiture of all P&I due under the Texas Constitution Section 50(a)(6).

In addition to having processes and procedures to ensure compliance with Texas Constitution Section 50(a)(6), the seller/servicer must have specific processes in place to cure any failure to comply with Texas Constitution Section 50(a)(6) by one of the authorized means, as required by the Selling Guide. However, any action taken, or not taken, in connection with a failure to comply with Texas Constitution Section 50(a)(6), even if such action is a result of the seller/servicer’s effort to cure a failure to comply, that results in any of the following constitutes a breach of the seller/servicer’s selling representations and warranties and/or servicing obligations and requirements:

  • a forfeiture of any principal or interest due under the mortgage loan;

  • invalidation of the mortgage loan as a first lien;

  • abatement of accrual of interest and the borrower’s obligations under the mortgage loan;

  • reduction in the principal amount of the mortgage loan; or

  • any modification of the amount, interest, rate, term, or other provision of the mortgage loan.

Such action, taken or not taken, shall be deemed a failure to correct a significant defect and/or a servicing defect that permits Fannie Mae to exercise any of the remedies provided in the Lender Contract, including the right to require the seller/servicer to repurchase the mortgage loan.

Recent Related Announcements

The table below provides references to recently issued Announcements that are related to this topic.

Announcements Issue Date
Announcement SVC-2023-06 December 20, 2023
Announcement SVC-2023-03 May 10, 2023
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