Selling GuideFannie Mae Single Family

December 06, 2016

Selling Guide: Fannie Mae Single FamilyPublished December 06, 2016

December 06, 2016

Fannie Mae Copyright Notice

(1) 2016 Fannie Mae. No part of this publication may be reproduced in any form or by anymeans without Fannie Maes prior written permission, except as may be provided herein orunless otherwise permitted by law. Limited permission to reproduce this publication in print inwhole or in part and limited permission to distribute electronically parts of this publication aregranted to Fannie Mae-approved lenders, servicers, and other mortgage finance professionals, forinternal business purposes only and strictly for their own use in originating mortgages, sellingmortgages to Fannie Mae, or servicing mortgages for Fannie Mae. Fannie Mae may revoke theselimited permissions by written notice to any or all Fannie Mae-approved users.

A full version of this publication is also available on the AllRegs website of MortgageResource Center, Inc., (MRC), which posts this publication under license from and with theexpress permission of Fannie Mae. MRC is the exclusive third-party electronic publisher ofthis publication. Fannie Mae makes no representation or warranty regarding any of the features,functionality, or other contents of the AllRegs website. If there should ever be a differencebetween this publication as it appears on the AllRegs website and the version published byFannie Mae, the difference is an error. In such event, the Fannie Mae version of this publicationshall be deemed the correct authoritative version. Material discrepancies between the twoversions, identified by Fannie Mae or otherwise brought to our attention, may be addressed byAnnouncement.

You acknowledge and agree (individually and on behalf of the entity for which you are accessingthis publication,You) that You may not make any claim against Fannie Mae for any errorsand that Fannie Mae shall not be liable to You for any losses or damages whatsoever resultingdirectly or indirectly from any errors.

December 06, 2016

Printed copies may not be the most current version. For the most current version, go to the online version athttps://www.fanniemae.com/singlefamily/originating-underwriting. i

Table of ContentsPreface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xixPart A, Doing Business with Fannie Mae . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Subpart A1, Approval Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3A1-1, Application and Approval of Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

A1-1-01, Application and Approval of Lender (03/29/2016) . . . . . . . . . . . . . . . 4Subpart A2, Lender Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

A2-1, Contractual Obligations for Fannie MaeApproved Lenders . . . . . . . . . . . . . . 9A2-1-01, Contractual Obligations for Lenders (04/09/2013) . . . . . . . . . . . . . . . 9A2-1-02, Nature of Mortgage Transaction (04/01/2009) . . . . . . . . . . . . . . . . . . 12A2-1-03, Indemnification for Losses (08/30/2016) . . . . . . . . . . . . . . . . . . . . . . 13

A2-2, Contractual Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . 16A2-2-01, Contractual Representations and Warranties (10/24/2016) . . . . . . . . . 16A2-2.1, Additional Selling Representations and Warranties . . . . . . . . . . . . . . . 19

A2-2.1-01, Selling Representations and Warranties Overview(04/01/2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19A2-2.1-02, Delivery Information and Delivery-Option SpecificRepresentations and Warranties (08/30/2016) . . . . . . . . . . . . . . . . . . . . . . 19A2-2.1-03, Document Warranties (08/20/2013) . . . . . . . . . . . . . . . . . . . . 22A2-2.1-04, Limited Waiver and Enforcement Relief of Representationsand Warranties for Mortgages Submitted to DU (12/06/2016) . . . . . . . . . 26A2-2.1-05, Invalidation of Limited Waiver of Representations andWarranties (01/27/2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30A2-2.1-06, Life-of-Loan Representations and Warranties (11/03/2015). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

A2-3, Lender Breach of Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44A2-3.1, Lender Breach of Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

A2-3.1-01, Lender Breach of Contract (02/23/2016) . . . . . . . . . . . . . . . . 45A2-3.1-02, Sanctions, Suspensions, and Terminations (02/23/2016) . . . . . 48

A2-3.2, Loan Repurchases and Make Whole Payments Requested by FannieMae . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

A2-3.2-01, Loan Repurchases and Make Whole Payments Requested byFannie Mae (08/30/2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51A2-3.2-02, Enforcement Relief for Breaches of Certain Representationsand Warranties Related to Underwriting and Eligibility (12/06/2016) . . . . 57A2-3.2-03, Remedies Framework (08/30/2016) . . . . . . . . . . . . . . . . . . . . 67

A2-3.3, Compensatory Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74A2-3.3-01, Compensatory Fees (07/30/2013) . . . . . . . . . . . . . . . . . . . . . . 74

A2-4, Master Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77A2-4-01, Master Agreement Overview (12/06/2016) . . . . . . . . . . . . . . . . . . . . 77

December 06, 2016

Printed copies may not be the most current version. For the most current version, go to the online version athttps://www.fanniemae.com/singlefamily/originating-underwriting. ii

A2-4-02, Terms of a Master Agreement (04/01/2009) . . . . . . . . . . . . . . . . . . . 79A2-4-03, Variances and Special Provisions (12/06/2016) . . . . . . . . . . . . . . . . . 80A2-4-04, Breaches of a Master Agreement (04/09/2013) . . . . . . . . . . . . . . . . . 81

A2-5, Mortgage Files and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83A2-5.1, Establishment and Maintenance of Mortgage Files and Records . . . . . 84

A2-5.1-01, Overview of Mortgage Files and Records (04/09/2013) . . . . . 84A2-5.1-02, Individual Mortgage Loan Files (08/25/2015) . . . . . . . . . . . . 85A2-5.1-03, Electronic Records, Signature, and Transactions(07/29/2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87A2-5.1-04, Lenders or Document Custodians Electronic TransactionsWith Third Parties (07/26/2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

A2-5.2, Ownership, Retention, and Examination of Mortgage Files andRecords . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

A2-5.2-01, Ownership of Mortgage Loan Files and Records(04/01/2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94A2-5.2-02, Access to Records (04/09/2013) . . . . . . . . . . . . . . . . . . . . . . . 95A2-5.2-03, Retention and Storage of Mortgage File Records(04/09/2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

A2-6, Fannie Mae Trade Name and Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . 99A2-6-01, Fannie Mae Trade Name and Trademarks (04/01/2009) . . . . . . . . . . 99

Subpart A3, Getting Started With Fannie Mae . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103A3-1, Fannie Maes Technology Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

A3-1-01, Fannie Maes Technology Products (04/01/2009) . . . . . . . . . . . . . . 104A3-2, Compliance With Requirements and Laws . . . . . . . . . . . . . . . . . . . . . . . . . . 106

A3-2-01, Compliance With Laws (08/30/2016) . . . . . . . . . . . . . . . . . . . . . . . 106A3-2-02, Responsible Lending Practices (12/16/2014) . . . . . . . . . . . . . . . . . . 113

A3-3, Third-Party Lending Functions and Servicing Arrangements . . . . . . . . . . . . 117A3-3-01, Outsourcing of Mortgage Processing and Third-Party Originations(12/15/2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118A3-3-02, Concurrent Servicing Transfers (02/23/2016) . . . . . . . . . . . . . . . . . 121A3-3-03, Other Servicing Arrangements (12/15/2015) . . . . . . . . . . . . . . . . . . 126A3-3-04, Document Custodians (02/23/2016) . . . . . . . . . . . . . . . . . . . . . . . . . 129A3-3-05, Custody of Mortgage Documents (09/27/2011) . . . . . . . . . . . . . . . . 136A3-3-06, Fannie Mae's Designated Document Custodian (06/28/2011) . . . . . 139A3-3.1, Other Document Custodians . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

A3-3.1-01, Operational Requirements for all Document Custodians(12/15/2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141A3-3.1-02, Document Custodian Reporting Requirements: Active andInactive Status (10/02/2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144

A3-3.2, Document Custodian Electronic Transactions . . . . . . . . . . . . . . . . . . 147