source:
  type: guide
  id: fnma-svc-e-5-05
  authority: Fannie Mae Servicing Guide E-5-05 — Reimbursing Law Firms/Reimbursement
    of Uncollected Fees, Costs or Advances
  description: Fannie Mae Servicing Guide E-5-05 — Reimbursing Law Firms/Reimbursement
    of Uncollected Fees, Costs or Advances.
  coverage_tier: operative
obligations:
- id: fnma-svc-e-5-05-full
  canonical_id: fnma-svc-e-5-05-full
  section: Fannie Mae Servicing Guide E-5-05 — Reimbursing Law Firms/Reimbursement
    of Uncollected Fees, Costs or Advances
  type: do
  tags:
  - regulator-direct
  - fnma
  - servicing-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Servicing Guide E-5-05 — Reimbursing Law Firms/Reimbursement
      of Uncollected Fees, Costs or Advances
    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-5-05, Reimbursing Law Firms/Reimbursement of Uncollected Fees,
      Costs or Advances (02/12/2020) Introduction This topic contains the following:
      Foreclosure Milestone Invoicing Schedules Reimbursing the Law Firm When Foreclosure
      Proceedings are Stopped Reimbursing the Law Firm When a Bankruptcy Referral
      is Closed Prior to Completion Collecting Legal Fees, Costs and Escrow or Corporate
      Advances from the Borrower Reimbursement of Uncollected Fees, Costs and Advances
      Foreclosure Milestone Invoicing Schedules Fannie Mae has established attorney
      fee milestone invoicing schedules for judicial and non-judicial foreclosures.The
      following table outlines the requirements for handling invoices the law ﬁrms
      submits to the servicer. ✓ The servicer must... Review the invoice and ensure
      the law ﬁrm has complied with the milestone invoicing schedule for the applicable
      jurisdiction. Compensate the law ﬁrm for the applicable percentage of the allowable
      foreclosure attorney fee based on the last milestone completed. Note: The servicer
      must not prorate foreclosure attorney fees between milestones. Work with the
      law ﬁrm as needed in the applicable jurisdiction to develop invoicing standards
      that are in accordance with Fannie Mae’s milestone invoicing schedule requirements.
      The following table sets forth the milestone invoicing schedule for a judicial
      foreclosure action. Judicial Foreclosure Milestone Percentage of Allowable Foreclosure
      Fee Title requested 30% Title reviewed 40% Published May 13, 2026 514 Judicial
      Foreclosure Milestone Percentage of Allowable Foreclosure Fee Complaint ﬁled
      50% Service started 60% Service complete 70% Aﬃdavit/judgment prepared 80% Judgment
      to court 90% Bid reviewed/Conﬁrmed 95% Foreclosure sale held/Documents recorded
      100% The following table sets forth the milestone invoicing schedule for a non-judicial
      foreclosure action. Non-Judicial Foreclosure Milestone Percentage of Allowable
      Foreclosure Fee Title requested 30% Title reviewed 65% Notices started 75% First
      legal 85% Foreclosure sale package 95% Foreclosure sale held/Documents recorded
      100% Reimbursing the Law Firm When Foreclosure Proceedings are Stopped If foreclosure
      proceedings are stopped (e.g., because the borrower ﬁles for bankruptcy, the
      mortgage loan is reinstated, or a workout agreement is executed) and foreclosure
      proceedings are subsequently recommenced, the fee paid to the law ﬁrm for the
      subsequent foreclosure proceedings will vary depending on whether the earlier
      proceedings can be resumed or must be started over. The following table outlines
      the servicer’s Published May 13, 2026 515 responsibilities for compensating
      the law ﬁrm for foreclosure attorney fees when a foreclosure is stopped. If
      the foreclosure proceedings are stopped and... Then the servicer must compensate
      the law ﬁrm for... later resumed fees for completion of the foreclosure in accordance
      with the established maximum allowable foreclosure fees (see Allowable Foreclosure
      Attorney Fees Exhibit), and any fees for which the law ﬁrm obtains the appropriate
      excess fee approval (see F-4-02, List of Contacts). later started over (or a
      new foreclosure action is commenced) • all fees incurred for the actual services
      rendered prior to the initial action being stopped, based on the last foreclosure
      milestone completed (see Foreclosure Milestone Invoicing Schedules earlier in
      this topic); and • fees in accordance with the established maximum allowable
      foreclosure fee for completion of the subsequent foreclosure proceeding. never
      resumed all fees incurred for the actual services rendered prior to the action
      being stopped, based on the last foreclosure milestone completed (see Foreclosure
      Milestone Invoicing Schedules earlier in this topic). Reimbursing the Law Firm
      When a Bankruptcy Referral is Closed Prior to Completion If a bankruptcy referral
      is closed (e.g., bankruptcy case is closed or dismissed) prior to the law ﬁrm
      completing all the services covered by the bankruptcy legal service referral,
      the servicer must reimburse the law ﬁrm for attorney fees that have been prorated
      to reasonably relate to the amount of legal work actually performed by the law
      ﬁrm and actual, reasonable, and necessary costs incurred by the law ﬁrm. Collecting
      Legal Fees, Costs and Escrow or Corporate Advances from the Borrower The servicer
      and the law ﬁrm may charge the borrower only those default-related legal expenses,
      including foreclosure and bankruptcy-related fees and costs, that are permitted
      under the terms of the note, security instrument, and applicable laws. The following
      table outlines additional servicer responsibilities for collecting legal fees,
      costs, and escrow or corporate advances from the borrower, where legally permissible,
      and paying the law ﬁrm for legal fees and costs. Published May 13, 2026 516
      ✓ The servicer must... Include as part of the amount required to reinstate or
      pay oﬀ the mortgage loan • all legal fees and costs that were incurred in connection
      with the foreclosure, bankruptcy or related proceedings, and • all escrow or
      corporate advances required to protect Fannie Mae’s lien and the property securing
      the mortgage loan, to the extent permitted by the terms of the note, security
      instrument, and applicable laws. Take all legally permissible steps to minimize
      the amount of uncollected fees, costs, and escrow or corporate advances, such
      as shortening the time period for which a reinstatement or payoﬀ quote is valid
      or instructing the borrower to contact the servicer for updated ﬁgures. Retain
      all records justifying its determination that any legal fees or costs, or escrow
      or corporate advances were not legally permissible to collect from the borrower,
      including the date the payoﬀ or reinstatement quote was issued, the “good through”
      date for the payoﬀ or reinstatement quote, and the date the fee, cost, or advance
      was actually incurred. Ensure that all applicable and permissible legal fees
      and costs and escrow or corporate advances are collected from the borrower as
      a condition of the reinstatement, workout agreement, or payoﬀ. Pay the law ﬁrm
      for the fees and costs incurred by the law ﬁrm even if suﬃcient funds were not
      collected from the borrower. Reimbursement of Uncollected Fees, Costs and Advances
      The servicer cannot request that Fannie Mae reimburse it for any legal fees,
      costs, or escrow or corporate advances that it failed to include as part of
      the amount required to reinstate or pay oﬀ the loan, unless it was not legally
      permissible to collect the fees, costs, or escrow or corporate advances from
      the borrower. If it was not legally permissible to collect fees, costs, or escrow
      or corporate advances from the borrower, Fannie Mae will reimburse the servicer
      for such items to the extent that services were performed to protect Fannie
      Mae’s interests; services were actually rendered; and the fees, costs, or escrow
      or corporate advances were actual, reasonable, and necessary and complied with
      Fannie Mae’s guidelines. The servicer must follow the procedures in F-1-05,
      Expense Reimbursement, to request reimbursement for attorney fees, and other
      costs and/or escrow or corporate advances. Recent Related Announcements Published
      May 13, 2026 517 The table below provides references to recently issued Announcements
      that are related to this topic. Announcements Issue Date Announcement SVC-2020-01
      February 12, 2020 Announcement SVC-2019-02 April 10, 2019'
  judgment: false
