A4-2.2-01, Selecting and Retaining Law Firms (05/08/2024)

The servicer is responsible for selecting qualified, experienced law firms for all jurisdictions to handle default-related legal services relating to Fannie Mae mortgage loans. Default related legal services include foreclosure, workout options, bankruptcy and related litigation.

See  F-2-04, Firm Minimum RequirementsF-2-04, Firm Minimum Requirements  and Compliance with the HERA in Selling Guide A3-2-01, Compliance with Laws for additional information regarding requirements for law firm selection. For a Mortgage Release, a servicer is authorized to select a third-party other than a law firm to prepare documentation; however, the servicer must select qualified and experienced vendors to complete the services related to this activity.

In order to mitigate risk arising from the concentration of legal work relating to Fannie Mae mortgage loans, the servicer must select and retain an appropriate number of law firms for each jurisdiction.

Fannie Mae does not allow for the direct referrals of Fannie Mae mortgage loans to trustees for foreclosure in any jurisdiction.

Fannie Mae retains counsel directly for legal services relating to acquired properties.

The following table lists the servicer's duties related to law firm selection.

If the servicer concludes that a law firm does not meet Fannie Mae’s minimum requirements, or as a result of the due diligence process decides not to retain the law firm, the servicer must inform the law firm that it has not been selected. Information relating to law firms that are not selected and retained by the servicer must be maintained for the longer of any retention period applicable to the servicer, or seven years.

The servicer is not obligated to inform Fannie Mae if the servicer

• determines that a law firm does not meet the minimum requirements, or

• decides not to retain a law firm.

The servicer must submit a Servicer Selection Form (Form 200) to Fannie Mae for each law firm it wishes to retain to provide default-related legal services for Fannie Mae mortgage loans. By submitting Form 200, the servicer certifies the law firm’s satisfaction of Fannie Mae’s minimum requirements and other certain required disclosures. 

The following table provides Fannie Mae’s requirements related to the submission of Form 200.

Within 15 business days following the submission of Form 200, Fannie Mae expects that it will be in a position to issue a "No Objection" determination, an "Objection" determination, or request additional information for each Form 200 submitted.

The following table provides the servicer with further instructions based on Fannie Mae's response to Form 200.

The servicer cannot rely upon the fact that another servicer previously submitted Form 200 with respect to a law firm and received a ”No Objection” determination.

All law firms that receive a "No Objection" determination from Fannie Mae must complete Fannie Mae new law firm training. Law firms only have to attend this training once, regardless of the number of servicers that select and retain the law firm.

Law firms must also execute a limited retention agreement. The limited retention agreement will recognize and reflect a joint attorney-client relationship between the law firm, Fannie Mae and the servicer. It will also provide that it controls in the event that there are any inconsistent provisions in any agreement between the law firm and the servicer. The servicer may access the form of the limited retention agreement by logging in to the password-protected portion of Fannie Mae’s website. Fannie Mae considers the form of the limited retention agreements to be confidential and proprietary information, and the servicer must treat the forms consistent with this classification.

From time to time, servicers retain counsel at their own expense to represent Fannie Mae and/or the servicer pursuant to their indemnification obligations to Fannie Mae (Special Counsel). Special Counsel retained and paid by servicers pursuant to their indemnification obligations to Fannie Mae do not have to be selected and retained pursuant to the guidelines described in  A4-2.2-01, Selecting and Retaining Law FirmsA4-2.2-01, Selecting and Retaining Law Firms. The following table describes the requirements of the servicer if it retains Special Counsel.

Once any issues for which Special Counsel was retained are resolved, the servicer must transition the foreclosure, bankruptcy, or eviction matter back to the law firm to which it was originally referred for any required further proceedings.

See Selling Guide A2-1-03, Indemnification for Losses for additional information.