source:
  type: guide
  id: fnma-svc-e-3.2-09
  authority: Fannie Mae Servicing Guide E-3.2-09 — Conducting Foreclosure Proceedings
  description: Fannie Mae Servicing Guide E-3.2-09 — Conducting Foreclosure Proceedings.
  coverage_tier: operative
obligations:
- id: fnma-svc-e-3.2-09-full
  canonical_id: fnma-svc-e-3.2-09-full
  section: Fannie Mae Servicing Guide E-3.2-09 — Conducting Foreclosure Proceedings
  type: do
  tags:
  - regulator-direct
  - fnma
  - servicing-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Servicing Guide E-3.2-09 — Conducting Foreclosure Proceedings
    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: 'E-3.2-09, Conducting Foreclosure Proceedings (10/13/2021) Introduction
      This topic contains the following: Conducting Foreclosure Proceedings When Fannie
      Mae Is the Mortgagee of Record Conducting Foreclosure Proceedings When the Servicer
      Is the Mortgagee of Record Conducting Foreclosure Proceedings When MERS Is the
      Mortgagee of Record Conducting Foreclosure Proceedings When Fannie Mae Is the
      Mortgagee of Record The servicer must conduct the foreclosure in Fannie Mae’s
      name when Fannie Mae is the mortgagee of record for all mortgage loans except
      those for which: the servicer has the entire foreclosure loss risk, or Fannie
      Mae and the service share the foreclosure loss risk, with the servicer having
      the responsibility for marketing the acquired property. For these excepted mortgage
      loans, the servicer must request that Fannie Mae reassign the mortgage loan
      to it so the foreclosure can be completed in the servicer''s name. Published
      May 13, 2026 452 Note: For requirements on removing a regular servicing option
      delinquent MBS mortgage loan from an MBS pool prior to foreclosure refer to
      A1-3-02, Fannie Mae-Initiated Repurchases, Indemniﬁcations, Make Whole Payment
      Requests and Deferred Payment Obligations. See also A1-3-01, Requirements for
      Voluntary Repurchase. The servicer must execute any required substitutions of
      trustees when Fannie Mae has granted the servicer its LPOA to do so on Fannie
      Mae''s behalf. However, if state law or customary practice prohibits an attorney-in-fact
      from executing substitutions of trustees, the servicer must submit the substitution
      of trustee documents to Fannie Mae for execution before the foreclosure proceedings
      begin. Conducting Foreclosure Proceedings When the Servicer Is the Mortgagee
      of Record When the servicer is the mortgagee of record for a mortgage loan,
      the jurisdiction in which the security property is located will aﬀect how the
      foreclosure proceedings are conducted or initiated. In most states, the law
      ﬁrm must initiate the proceedings in the servicer''s name when the servicer
      is the mortgagee of record or in the participating lender''s name when the servicer
      is not the mortgagee of record for a participation pool mortgage loan. For mortgage
      loans for which Fannie Mae has the entire foreclosure loss risk, and those for
      which Fannie Mae and the servicer share the foreclosure loss risk, with Fannie
      Mae having the responsibility of marketing the acquired property, the law ﬁrm
      must subsequently have title vested in Fannie Mae''s name in a manner that will
      not result in the imposition of a transfer tax. For mortgage loans for which
      the servicer has the entire foreclosure loss risk, and those for which Fannie
      Mae and the servicer share the foreclosure loss risk, with the servicer having
      the responsibility of marketing the acquired property, the law ﬁrm must have
      title vested in the servicer’s name in accordance with the servicer’s requirements.
      The servicer and the law ﬁrm must determine the most appropriate method to use
      in each jurisdiction. In any state or jurisdiction in which the foreclosure
      proceedings must be conducted in Fannie Mae’s name to prevent the imposition
      of a transfer tax (such as Rhode Island; New Hampshire; Maine; or Orleans Parish,
      Louisiana), an assignment of the mortgage or deed of trust to Fannie Mae must
      be prepared and recorded in a timely manner to avoid any delays in the initiation
      of the foreclosure proceedings. If the servicer believes that a foreclosure
      proceeding must be conducted in Fannie Mae’s name in any other jurisdiction
      to prevent the imposition of a transfer tax, the servicer must contact Fannie
      Mae’s Legal department (see F-4-02, List of Contacts) for permission to do so.
      When a document custodian has custody of an original unrecorded assignment of
      the mortgage to Fannie Mae, the servicer may either request return of that document
      so it can be recorded, or prepare a new assignment if doing so will expedite
      the process. Once the assignment to Fannie Mae has been recorded, the foreclosure
      proceedings must be conducted in Fannie Mae’s name. Conducting Foreclosure Proceedings
      When MERS Is the Mortgagee of Record Published May 13, 2026 453 The servicer
      must not name MERS as a plaintiﬀ or foreclosing party in any foreclosure action
      on a Fannie Mae mortgage loan. When MERS is the mortgagee of record, the servicer
      must prepare an assignment from MERS to the servicer and bring the foreclosure
      in its own name unless Fannie Mae speciﬁcally allows the foreclosure to be brought
      in the name of Fannie Mae. In that event, the assignment must be from MERS to
      Fannie Mae, in care of the servicer at the servicer''s address for receipt of
      notices. The assignment must be prepared and provided to the law ﬁrm in the
      referral package. Fannie Mae will not reimburse the servicer for any expense
      incurred in preparing or recording an assignment of the mortgage loan from MERS
      to the servicer or to Fannie Mae. If the borrower reinstates the mortgage loan
      prior to completion of the foreclosure proceedings, re-assigning and re-registering
      the mortgage loan with MERS will be at the discretion and expense of the servicer.
      The servicer must consult with the law ﬁrm to determine if any other legal requirements
      apply when conducting foreclosures of mortgage loans in which MERS is the prior
      mortgagee of record. See Additional Required Foreclosure Referral Documents
      in E-1.1-02, Required Referral Documents for additional information regarding
      MERS and proper assignments. Recent Related Announcements The table below provides
      references to recently issued Announcements that are related to this topic.
      Announcements Issue Date Announcement SVC-2021-07 October 13, 2021 Announcement
      SVC-2019-03 May 15, 2019'
  judgment: false
