source:
  type: guide
  id: fnma-svc-a1-4.1-01
  authority: Fannie Mae Servicing Guide A1-4.1-01 — Defining a Breach of Contract
  description: Fannie Mae Servicing Guide A1-4.1-01 — Defining a Breach of Contract.
  coverage_tier: operative
obligations:
- id: fnma-svc-a1-4.1-01-full
  canonical_id: fnma-svc-a1-4.1-01-full
  section: Fannie Mae Servicing Guide A1-4.1-01 — Defining a Breach of Contract
  type: do
  tags:
  - regulator-direct
  - fnma
  - servicing-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Servicing Guide A1-4.1-01 — Defining a Breach of Contract
    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: 'A1-4.1-01, Deﬁning a Breach of Contract (06/21/2017) Published
      May 13, 2026 47 Any of the following events constitute a breach of the servicer’s
      contractual obligations: The servicer’s failure to comply with any provision
      of the Lender Contract including, but not limited to, the following: a failure
      to establish and maintain satisfactory accounts for the deposit of Fannie Mae’s
      and borrowers’ funds; the use of Fannie Mae’s or borrowers’ funds in any manner
      other than as permitted by this Servicing Guide including, but not limited to
      the failure to deposit all funds collected for the mortgage loans into the proper
      custodial account not later than the ﬁrst business day following their receipt,
      or the failure to remit all funds due Fannie Mae within the required time frames;
      the failure to ensure that the servicing-related policies for servicing all
      Fannie Mae-issued MBS mortgage loan pools (including those PFP) are in compliance
      with this Servicing Guide and that the mortgage loans in the MBS pools are all
      serviced in a consistent manner; the failure to bear the risk of loss from borrower
      defaults for MBS pools serviced under the regular servicing option; the failure
      to maintain adequate and accurate accounting records and mortgage loan servicing
      records, in accordance with Fannie Mae’s requirements; the failure to take prompt
      and diligent action consistent with applicable law to collect sums past due
      on the mortgage loans or to take any other diligent action that Fannie Mae or
      acceptable industry practice reasonably requires with respect to mortgage loans
      that are in default; or the failure to take diligent action consistent with
      applicable law to foreclose any mortgage loan that is in default, whether or
      not resulting from the acts or omissions of a law ﬁrm or other person or entity
      the servicer chooses to eﬀect such foreclosure. Unacceptable performance as
      determined by Fannie Mae with regard to the servicer’s compliance with the Lender
      Contract, including, but not limited, to servicer performance measurements as
      described in the Servicing Guide, STAR Program results and the requirements
      of any written performance improvement plan. The servicer’s insolvency, the
      adjudication of the servicer as a bankrupt, the appointment of a receiver, the
      servicer’s execution of a general assignment for the beneﬁt of its creditors,
      or any change in the servicer’s ﬁnancial status that, in Fannie Mae’s opinion,
      materially and adversely aﬀects its ability to provide satisfactory servicing
      of the mortgage loans (if any of these events should occur, no interest in any
      mortgage loan or pool of mortgage loans shall be deemed an asset or liability
      of the servicer’s successors or assigns, nor shall any interest pass by operation
      of law without Fannie Mae’s consent). The sale of a majority interest in the
      servicer or a change in the corporate status or structure of a corporate servicer
      without Fannie Mae’s prior written consent. A change in the servicer’s ﬁnancial
      or business condition, or in its operations, which, in Fannie Mae’s sole judgment,
      is material and adverse. The servicer’s failure to meet Fannie Mae’s standards
      and requirements for eligible servicers if, in Fannie Mae’s opinion, the failure
      materially and adversely aﬀects the servicer’s ability to comply with the provisions
      of the Lender Contract. The ﬁnding by a court of competent jurisdiction that
      the servicer, or any of its principal oﬃcers, has committed an act that constitutes
      civil fraud, or the conviction of the servicer or its oﬃcer(s) for any Published
      May 13, 2026 48 criminal act that is related to the servicer’s mortgage loan
      servicing activities, if Fannie Mae believes that such act materially and adversely
      aﬀects the servicer’s reputation or the reputation or interests of Fannie Mae.
      The placement of the servicer on probation or restriction of its activities
      in any manner by a federal or state government agency that would materially
      and adversely aﬀect the servicer’s ability to comply with the terms or conditions
      of the Lender Contract. Any judgment, order, ﬁnding or regulatory action to
      which the servicer is subject that would materially and adversely aﬀect the
      servicer’s ability to comply with the terms or conditions of the Lender Contract.
      Recent Related Announcements There are no recently issued Announcements related
      to this topic.'
  judgment: false
