Fannie Mae Single Family Servicing Guide D1-4.1-05, Enforcing the Due-on-Sale (or Due-on-Transfer) Provision (11/08/2017)
Fannie Mae Single Family Servicing Guide topic D1-4.1-05 (Enforcing the Due-on-Sale (or Due-on-Transfer) Provision). Gap-fill (verbatim, ID-diff).
Verbatim regulatory text
Verbatim provisions from Fannie Mae Single Family Servicing Guide D1-4.1-05, Enforcing the Due-on-Sale (or Due-on-Transfer) Provision (11/08/2017) — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
Fannie Mae Single Family Servicing Guide D1-4.1-05
(11/08/2017) Introduction This topic contains information on enforcing the due-on-sale (or due-on-transfer) provision. Unless the transfer of ownership is an exempt transaction or involves a property that secures a “window-period” mortgage loan, the servicer must accelerate the debt. The servicer must send any notices required under the terms of the mortgage loan and applicable law before it accelerates the debt. If the funds required to satisfy the debt are not received, the servicer should then begin foreclosure proceedings.
Fannie Mae Single Family Servicing Guide D1-4.1-05
Qualifying Mortgage Assumption Workout Option for information on mortgage loan assumptions. Optional repurchase of certain mortgage loans. See
Fannie Mae Single Family Servicing Guide D1-4.1-05
Requirements for Voluntary Repurchase for additional information. Potential litigation. If the legality of the due-on-sale (or due-on-transfer) provision is questioned or litigated, see
Fannie Mae Single Family Servicing Guide D1-4.1-05
Handling Notices of Liens, Legal Action, Other Actions Impacting Fannie Mae’s Interest for Fannie Mae’s requirements for handling the action. Recent Related Announcements There are no recently issued Announcements related to this topic. Section D1-4.2, Information Relating to Transfers of Ownership on Conventional Mortgage Loans
Fannie Mae Single Family Servicing Guide D1-4.1-05
Conventional Mortgage Loans that Do Not Include a Due- on-Sale (or Due-on-Transfer) Provision (09/09/2020) Introduction This topic contains information on conventional mortgage loans that do not include a due-on-sale (or due-on- transfer) provision. The following table describes the servicer’s responsibility if a mortgage loan not subject to a due-on-sale (or due-on-transfer) provision is modified or subject to a payment deferral.
Fannie Mae Single Family Servicing Guide D1-4.1-05
Conventional Mortgage Loans That Include a Due- on-Sale (or Due-on-Transfer) Provision for additional information. For all other mortgage loans that are not subject to a due-on-sale (or due-on-transfer) provision, there are no restrictions on the transfer of ownership. However, the servicer must determine that the purchaser’s credit and financial capacity is acceptable under current Fannie Mae underwriting guidelines if the previous borrower requests a release of liability. See F-1-28, Reviewing a Transfer of Ownership for Credit and Financial Capacity for the servicer’s requirements for evaluating a request for a release of liability. The servicer must follow Obtaining MI Approval for a Conventional Mortgage Loan in F-1-17, Processing a Transfer of Ownership for information on obtaining mortgage insurer approval and in Completing a Transfer of Ownership in F-1-17, Processing a Transfer of Ownership for detailed requirements related to executing the assumption (or assumption and release) agreement. The servicer must notify the applicable property insurance companies, tax authorities, the mortgage insurer, and any other interested parties. If the purchaser did not provide a new property insurance policy, the servicer must request the insurer to prepare an endorsement to the existing property insurance policy to name the new borrower. The servicer must also obtain a new MI policy for an insured mortgage loan or an agreement that extends the previous coverage to the new borrower. Recent Related Announcements The table below provides references to recently issued Announcements that are related to this topic. Announcements Issue Date Announcement SVC-2020-04 September 9, 2020
Fannie Mae Single Family Servicing Guide D1-4.1-05
Conventional Mortgage Loans That Include a Due- on-Sale (or Due-on-Transfer) Provision (11/08/2017) Introduction This topic contains the following: Determining When to Refer to the Participating Lender’s Policy Non-Exempt Transactions: Exceptions for Certain Loan Types if the Purchaser is Creditworthy Determining When to Refer to the Participating Lender’s Policy The servicer must refer to the participating lender’s policies for the following mortgage loans as Fannie Mae’s policies do not apply: Participation pool mortgage loans held in portfolio that were purchased from a supervised lender under commitments dated before August 1, 1983. Concurrent sales participation pool mortgage loans in which it holds a majority interest. Non-Exempt Transactions: Exceptions for Certain Loan Types if the Purchaser is Creditworthy The servicer is authorized to allow transfers of ownership for the following first lien mortgage loans if all of the criteria listed below are satisfied: All ARMs and GPARMs, except for the following: those closed under ARM Plans 975, 1029, and 1103; those that have extended fixed-rate periods (ARM Plans 659, 660, 661, 750, 751, 1423, 1437, 2724, 2725, 2726, 2727, 2728, 2729, 3223, 3224, 3225, 3226, 3227, 3228, 3252 (except as limited for those plans that may be used for Texas Section 50(a)(6) loans), if the transfer would take place during the fixed-rate period); and those that have been converted to fixed-rate mortgage loans. Fixed-rate portfolio mortgage loans that Fannie Mae purchased under commitment contracts dated before November 10, 1980 unless the purchase of the property is financed directly or indirectly with wraparound or secondary financing from an institutional lender, or Fannie Mae has pooled a mortgage loan originally held as a portfolio mortgage loan to back an MBS. Fannie Mae will notify the servicer when it does this. The servicer must determine that all of the criteria listed in the following table are satisfied to approve a transfer of ownership.