source:
  type: guide
  id: fnma-sel-a2-3.1-02
  authority: Fannie Mae Selling Guide A2-3.1-02 — Sanctions, Suspensions, and Terminations
  description: Fannie Mae Selling Guide A2-3.1-02 — Sanctions, Suspensions, and Terminations.
  coverage_tier: operative
obligations:
- id: fnma-sel-a2-3.1-02-full
  canonical_id: fnma-sel-a2-3.1-02-full
  section: Fannie Mae Selling Guide A2-3.1-02 — Sanctions, Suspensions, and Terminations
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide A2-3.1-02 — Sanctions, Suspensions, and Terminations
    source_class: fnma-guide
    source_url: https://singlefamily.fanniemae.com/media/document/pdf/selling-guide
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-05-25T14:09:57Z'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: 'A2-3.1-02, Sanctions, Suspensions, and Terminations (02/23/2016)
      Introduction This topic contains information on the following subjects: Imposition
      of Sanctions Suspension of Selling Arrangement Termination Termination Without
      Cause Termination With Cause Imposition of Sanctions Published May 6, 2026 41
      When Fannie Mae determines that a lender’s performance of its selling and/or
      servicing obligations does not meet the standards in its Lender Contract, Fannie
      Mae may impose a formal sanction to give the lender oﬃcial notice of its shortcomings
      and an opportunity to correct its deﬁciencies. Prior to imposing any sanction,
      Fannie Mae will generally give the lender notice of the contemplated action
      so the lender can submit a written response or request a meeting with its Fannie
      Mae customer account team. The lender’s written response must include a description
      and explanation of any mitigating circumstances or speciﬁc proposals to satisfy
      Fannie Mae’s objections to the lender’s performance of its obligations under
      the Lender Contract. Fannie Mae reserves the right to omit these steps and take
      immediate action to terminate or suspend the Lender Contract at any time in
      accordance with the provisions thereof. If any act, omission, or failure of
      performance by a lender constitutes a breach of the Lender Contract, Fannie
      Mae is not obligated to impose a sanction prior to exercising its contractual
      right to terminate or suspend the lender’s selling arrangement, servicing arrangement,
      or all of its Lender Contract. If Fannie Mae initially chooses to place a lender
      under a formal sanction, Fannie Mae can subsequently decide that termination
      or suspension is the more appropriate action and take immediate steps to eﬀect
      the termination even if the terms of the sanction have not yet expired. Suspension
      of Selling Arrangement Fannie Mae may suspend a Lender Contract for a speciﬁed
      period of time or it may state that the suspension is for an “indeﬁnite period.”
      Fannie Mae usually speciﬁes an “indeﬁnite period” when Fannie Mae wants the
      lender to satisfy certain conditions—such as the hiring of additional staﬀ—before
      Fannie Mae removes the suspension. Fannie Mae may apply the suspension of a
      selling arrangement to all products or to speciﬁc products, depending on the
      type and seriousness of the lender’s failure to perform. Even when Fannie Mae
      suspends a lender’s selling arrangement, it will honor any outstanding whole
      loan commitments and MBS pool purchase contracts. However, if Fannie Mae decides
      to terminate the lender’s selling arrangement (or the entire Lender Contract)
      for cause either at or before the end of the suspension period, it may declare
      any outstanding pricing or purchase commitments or pool purchase contracts to
      be void. Fannie Mae may suspend the Lender Contract whenever a breach has been
      identiﬁed. Fannie Mae may suspend a lender''s right to add new mortgage loans
      to its Fannie Mae servicing portfolio—whether those mortgage loans represent
      new mortgage loans Fannie Mae would purchase or securitize or existing Fannie
      Mae-owned or Fannie Mae-securitized mortgage loans that would be transferred
      from another servicer. The suspension of new servicing may apply to all types
      of mortgage loans or to speciﬁc products, depending on the nature of the lender''s
      performance deﬁciencies. Termination Fannie Mae may terminate the Lender Contract,
      including selling and servicing, with or without cause, in accordance with Section
      IX of the MSSC. Termination Without Cause Fannie Mae may terminate a lender’s
      selling arrangement at any time without cause—eﬀective immediately—by providing
      the lender with written notice of Fannie Mae’s intent to do so. Published May
      6, 2026 42 A lender may terminate its selling arrangement at any time—and eﬀective
      immediately—by giving Fannie Mae written notice of its intent to do so. Any
      responsibilities or liabilities related to speciﬁc mortgages or MBS pools that
      the lender had before the termination will continue to exist after the termination
      unless Fannie Mae expressly agrees in writing to release the lender from those
      responsibilities and liabilities. The lender shall be responsible for all reasonable
      and customary costs and expenses related to the transfer of servicing in connection
      with a lender''s voluntary termination of its servicing rights. Termination
      of the lender’s selling arrangement does not aﬀect any obligations in connection
      with any pricing or purchase commitments or pool purchase contracts that the
      lender has outstanding with Fannie Mae at the time of the termination; provided
      however that Fannie Mae may declare any outstanding pricing or purchase commitments
      or pool purchase contracts to be void. Termination also does not release the
      lender from its responsibilities or liabilities related to mortgage loans and
      MBS pools that Fannie Mae purchased, securitized, or contracted to purchase
      or securitize before the termination, including the obligation to repurchase
      a mortgage loan in connection with the breach of a selling warranty, even if
      the breach is not discovered until after the termination, the breach did not
      result in any Fannie Mae losses, or the selling warranty was assumed in connection
      with an earlier transfer of servicing to another lender. Additional provisions
      related to termination of servicing are described in the Servicing Guide. Termination
      With Cause If Fannie Mae terminates the lender’s selling arrangement with cause,
      it will be eﬀective immediately and Fannie Mae may declare any outstanding pricing
      or purchase commitments or pool purchase contracts to be void. Additional provisions
      related to termination of servicing are set forth in the Servicing Guide. Recent
      Related Announcements There are no recently issued Announcements related to
      this topic. Section A2-3.2, Loan Repurchases and Make Whole Payments Requested
      by Fannie Mae'
  judgment: false
