source:
  type: guide
  id: fnma-svc-a1-2-02
  authority: Fannie Mae Servicing Guide A1-2-02 — Fannie Mae's Termination of the
    Lender Contract without Cause
  description: Fannie Mae Servicing Guide A1-2-02 — Fannie Mae's Termination of the
    Lender Contract without Cause.
  coverage_tier: operative
obligations:
- id: fnma-svc-a1-2-02-full
  canonical_id: fnma-svc-a1-2-02-full
  section: Fannie Mae Servicing Guide A1-2-02 — Fannie Mae's Termination of the Lender
    Contract without Cause
  type: do
  tags:
  - regulator-direct
  - fnma
  - servicing-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Servicing Guide A1-2-02 — Fannie Mae's Termination of the
      Lender Contract without Cause
    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: 'A1-2-02, Fannie Mae’s Termination of the Lender Contract without
      Cause (11/12/2014) Introduction This topic contains the following: Overview
      Servicer Options When the Termination without Cause Is Not Connected to the
      Sale of the Mortgage Loan When the Termination without Cause Is Connected to
      the Sale of the Mortgage Loan Transfer of Servicing Due to Delinquency Status
      Published May 13, 2026 9 Overview Fannie Mae may terminate the servicer’s contractual
      right to service without cause, in accordance with the MSSC. Also, see A1-4.1-02,
      Fannie Mae’s Remedies for information on Fannie Mae’s right to terminate with
      cause. Fannie Mae will give the servicer a termination notice. Any responsibilities
      or liabilities related to speciﬁc portfolio or MBS mortgage loans that the servicer
      had before the termination will continue to exist after the termination unless
      Fannie Mae expressly agrees in writing to release the servicer from those responsibilities
      and liabilities. When Fannie Mae terminates the Lender Contract, the servicer
      must comply with instructions provided by Fannie Mae regarding requirements
      reasonably necessary to eﬀectuate the transfer of servicing in connection with
      a termination. The servicer is responsible for all reasonable and customary
      costs and expenses related to the transfer of servicing in connection with a
      termination. Servicer Options When the Termination without Cause Is Not Connected
      to the Sale of the Mortgage Loan If Fannie Mae elects to terminate the servicing
      without cause and the termination is not in connection with the sale of Fannie
      Mae’s interest in the aﬀected mortgage loans, the servicer may attempt to arrange
      for a sale of the servicing of the mortgage loans to another Fannie Mae-approved
      servicer within the 90-day period following the issuance of Fannie Mae’s termination
      notice. The servicing must be sold to another Fannie Mae-approved servicer in
      good standing that, in Fannie Mae’s judgment, will properly service the mortgage
      loans to be transferred. Before the end of the 90 days, the servicer must notify
      Fannie Mae of any proposed sale, providing related information for Fannie Mae’s
      consideration. Fannie Mae must approve the transfer before the sale can be completed.
      Fannie Mae’s approval will not be unreasonably withheld. If Fannie Mae approves
      the transfer, it must be completed within 60 days after the date of approval
      and is subject to the following conditions: The transferor servicer (seller)
      is entitled to all the proceeds of the sale of servicing, but it must pay all
      costs and expenses related to the transfer. Fannie Mae will not pay a termination
      fee. The transferee servicer (purchaser) must assume warranties that were made
      to Fannie Mae when Fannie Mae purchased or securitized the mortgage loans being
      transferred, and all of the transferor servicer’s contractual obligations covering
      the servicing of the transferred mortgage loans, including (but not limited
      to) any outstanding claims. Once the transfer becomes eﬀective, the transferee
      servicer (purchaser) will be granted the same contractual rights and servicing
      compensation that the transferor servicer had received. The transferee servicer’s
      Published May 13, 2026 10 (purchaser’s) assumption of these warranties and obligations
      does not, in any way, release the transferor servicer from its obligations related
      to selling representations and warranties and servicing responsibilities or
      liabilities. Fannie Mae may terminate the servicer’s Lender Contract on the
      15th day following the end of the 90-day period if, at the end of the 90-day
      period following Fannie Mae’s termination notice without cause the servicer
      has not arranged to sell its servicing and given Fannie Mae the required notice,
      or Fannie Mae does not approve the proposed transfer. Fannie Mae may then transfer
      the servicing to the servicer of its choice. If Fannie Mae decides to do so,
      it may publicly announce that it is soliciting bids for the purchase of the
      servicing rights from Fannie Mae–approved servicers that are in good standing.
      Within ten days after any public announcement, Fannie Mae may negotiate and
      eﬀect the sale of the servicing rights to the highest satisfactory bidder. Regardless
      of whether Fannie Mae publicly solicits bids, it must pay the transferor servicer
      a termination fee (reduced by reasonable and customary costs and expenses related
      to the transfer of servicing). Termination Fee for Mortgage Loans Delivered
      Prior to January 1, 2013: For mortgage loans delivered prior to January 1, 2013,
      the termination fee is the amount equal to two times the servicer’s annualized
      servicing compensation—base servicing fee plus any excess yield—for the mortgage
      loan as of the termination date. Termination Fee for Mortgage Loans Delivered
      On or After January 1, 2013: For mortgage loans delivered on or after January
      1, 2013, the termination fee for a without cause termination is based on conditions
      existing as of the transfer date. The termination fee is an amount equal to
      the lesser of the following: Two times the Net Servicing Rate multiplied by
      the UPB as of the date of transfer of those mortgage loans subject to termination
      that are not delinquent. For purposes of this calculation, a mortgage loan will
      be deemed to be delinquent if, as of a month end transfer date, any payment
      is outstanding. In the event of a servicing transfer date that takes place other
      than at month end, a mortgage loan will be deemed to be delinquent if there
      is any payment outstanding as of the month end immediately preceding the transfer
      date. No termination fee will be paid for a delinquent mortgage loan. The market
      value of the contractual right to service the mortgage loans as established
      by a qualiﬁed market leader in servicing valuations using costs reﬂective of
      Fannie Mae’s cost to engage a subservicer, applying protocols appropriate for
      the risk of the portfolio as determined by Fannie Mae in its sole discretion.
      For purposes of calculating the termination fee, the “Net Servicing Rate” means
      the note rate of the mortgage loan less all of the following: a) the PTR due
      Fannie Mae, b) any guaranty fee due Fannie Mae, c) any excess servicing not
      retained by the servicer, d) any lender paid MI, and e) any other component
      of the note rate the servicer is not entitled to retain for servicing the loan,
      expressed as an annualized fractional percentage. When the Termination without
      Cause Is Connected to the Sale of the Mortgage Loan When Fannie Mae terminates
      the servicer’s servicing arrangement without cause and in connection with a
      sale of all of Fannie Mae’s interest in the aﬀected mortgages loans, the servicer
      will have no further rights in the Published May 13, 2026 11 servicing of the
      mortgage loans it had been servicing for Fannie Mae. For mortgage loans delivered
      prior to January 1, 2013, the termination fee in such a situation will be an
      amount equal to two times the servicer’s annualized servicing compensation—base
      servicing fee plus any excess yield—for the mortgage loan as of the termination
      date. For mortgage loans delivered on or after January 1, 2013 for which Fannie
      Mae terminates the servicer’s servicing arrangement without cause and in connection
      with a sale of Fannie Mae’s interest in the aﬀected mortgages loans, Fannie
      Mae will apply the same termination fee calculation utilized for terminations
      without cause referenced above applicable to mortgage loans delivered on or
      after January 1, 2013. However, if the servicing responsibilities or liabilities
      for a mortgage loan are retained by the servicer in connection with the sale
      of Fannie Mae’s interest, no termination fee will be paid. Transfer of Servicing
      Due to Delinquency Status For mortgage loans delivered on or after January 1,
      2013, Fannie Mae has the right to terminate and transfer the servicer’s servicing
      rights in a mortgage loan in the event the mortgage loan has two or more payments
      outstanding as of the “Determination Date,” which is deﬁned as a day of a month
      designated by Fannie Mae, taking into account necessary compliance with all
      applicable laws and regulations, including, without limitation, the federal
      RESPA and Regulation X, as amended. For example, a mortgage loan for which a
      monthly payment is due and owing for August 1 will have two payments outstanding
      as of September 2. In the event Fannie Mae intends to exercise its right to
      terminate and transfer the servicer’s servicing rights due to the delinquency
      status on mortgage loans delivered on or after January 1, 2013, Fannie Mae will
      give the servicer notice at least 90 days prior to the ﬁrst applicable termination
      date. If Fannie Mae has given the servicer such 90 days notice, Fannie Mae may
      thereafter suspend its exercise of such termination and transfer rights at any
      time; provided, however that upon the written request of the servicer Fannie
      Mae will provide up to 180 days notice prior to suspending the exercise of such
      termination and transfer rights. All terminations and transfers eﬀectuated pursuant
      to delinquency status are eﬀective as of the last day of the transfer month.
      Fannie Mae will not pay a termination fee in connection with a termination of
      the servicer’s servicing rights due to delinquency status. The mortgage loan
      servicing will transfer to and remain with the new servicer, even if the mortgage
      loan becomes current after the Determination Date. Recent Related Announcements
      There are no recently issued Announcements related to this topic. Chapter A1-3,
      Repurchases, Indemniﬁcations, and Make Whole Payment Requests Introduction This
      chapter includes information on repurchases, indemniﬁcations, and make whole
      payment requests. Published May 13, 2026 12'
  judgment: false
