source:
  type: guide
  id: fnma-svc-d1-5-01
  authority: Fannie Mae Servicing Guide D1-5-01 — Call Options and Cross-Default Provisions
  description: Fannie Mae Servicing Guide D1-5-01 — Call Options and Cross-Default
    Provisions.
  coverage_tier: operative
obligations:
- id: fnma-svc-d1-5-01-full
  canonical_id: fnma-svc-d1-5-01-full
  section: Fannie Mae Servicing Guide D1-5-01 — Call Options and Cross-Default Provisions
  type: do
  tags:
  - regulator-direct
  - fnma
  - servicing-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Servicing Guide D1-5-01 — Call Options and Cross-Default
      Provisions
    source_class: fnma-guide
    source_url: https://singlefamily.fanniemae.com/media/document/pdf/servicing-guide
    snapshot_id: cf63a82bbb4adfba
    fetched_at: '2026-05-22T23:53:19Z'
    content_hash: sha256:89df66c43baad07f8a8dd9d224492fff7d15e8839edba02ad0e74c7e50fe5da3
    paragraph_quote: 'D1-5-01, Call Options and Cross-Default Provisions (11/12/2014)
      Introduction This topic includes the following: Overview Call Options Cross-Default
      Provision Overview The servicer must maintain the integrity of Fannie Mae’s
      rights under the mortgage loan by the appropriate enforcement of call options
      and cross-default provisions in the security instrument. Call Options When a
      conventional mortgage loan includes a call option provision, the servicer must
      contact its Fannie Mae Servicing Representative (see F-4-02, List of Contacts)
      90 days before the call date to obtain Fannie Mae’s decision on whether it intends
      to exercise its option and, if so, whether the mortgage loan must be paid in
      full or Published May 13, 2026 281 whether Fannie Mae is willing to reﬁnance
      it. Whenever possible, Fannie Mae will reﬁnance the mortgage loan. If Fannie
      Mae decides to call a participation pool mortgage loan, the participating lender
      has the right to repurchase it, rather than exercise the call. Cross-Default
      Provision When a conventional ﬁrst lien mortgage loan that involves a leasehold
      estate contains a cross-default provision and the borrower is delinquent on
      their lease payments, the servicer’s action depends on the status of the mortgage
      loan, as described in the following table. If the lease payment is delinquent
      and the mortgage loan is... Then the servicer must... current either • advance
      its own funds to cure the lease default, or Note: The servicer may then bill
      the borrower for the funds it advanced. If the borrower does not repay the advance,
      the servicer may apply future mortgage loan payments toward the advance if the
      mortgage loan documents, local law, and government regulations do not prohibit
      it. • contact its Fannie Mae Servicing Representative (see F-4-02, List of Contacts)
      if it has determined that the cross-default provision should be exercised. delinquent
      and the servicer has determined that the default cannot be cured contact its
      Fannie Mae Servicing Representative (see F-4-02, List of Contacts) and recommend
      an appropriate action. In reaching its recommendation, the servicer should consider
      the amount of Fannie Mae’s investment in the property, the current value of
      the property, the nature of the real estate market in the area, and the type
      of MI coverage in eﬀect. The servicer may recommend any of the following: purchase
      of the land from the leaseholder—at the purchase price stipulated in the lease
      (This will enable Fannie Mae to acquire both the land and the improvements through
      foreclosure proceedings), assumption of the borrower’s interest in the lease
      estate—as long as the lease is assumable by the mortgagee without the leaseholder’s
      consent (Fannie Mae can then acquire the improvements by foreclosing on the
      mortgage loan and sell the acquired property subject to assumption of the lease),
      or forfeiture of Fannie Mae’s interest in the improvements to the leaseholder—as
      long as Fannie Mae would not incur any penalty or liability. Recent Related
      Announcements Published May 13, 2026 282 There are no recently issued Announcements
      related to this topic. Chapter D1-6, Addressing Notices of Liens, Legal Action,
      Property Forfeitures or Seizures, or Other Actions Introduction This chapter
      contains information on addressing notices of liens, legal action, property
      forfeitures or seizures, or other actions.'
  judgment: false
