source:
  type: guide
  id: fnma-svc-a1-4.2-01
  authority: Fannie Mae Servicing Guide A1-4.2-01 — Compensatory Fees Other Than Delays
    in the Liquidation Process
  description: Fannie Mae Servicing Guide A1-4.2-01 — Compensatory Fees Other Than
    Delays in the Liquidation Process.
  coverage_tier: operative
obligations:
- id: fnma-svc-a1-4.2-01-full
  canonical_id: fnma-svc-a1-4.2-01-full
  section: Fannie Mae Servicing Guide A1-4.2-01 — Compensatory Fees Other Than Delays
    in the Liquidation Process
  type: do
  tags:
  - regulator-direct
  - fnma
  - servicing-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Servicing Guide A1-4.2-01 — Compensatory Fees Other Than
      Delays in the Liquidation Process
    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: 'A1-4.2-01, Compensatory Fees Other Than Delays in the Liquidation
      Process (12/21/2022) If Fannie Mae believes the servicer is failing to comply
      with Fannie Mae’s servicing requirements, it may pursue a variety of remedies,
      either to correct a speciﬁc problem or to improve the servicer’s overall performance.
      One possible remedy is the imposition of a compensatory fee to compensate Fannie
      Mae for damages and to emphasize the importance Fannie Mae places on a particular
      aspect of the servicer’s performance. Sometimes, a compensatory fee will relate
      to the action the servicer took (or failed to take) for a speciﬁc mortgage loan.
      At other times, the compensatory fee may relate to the eﬀect that the servicer’s
      deﬁciencies may have on Fannie Mae’s cash ﬂow. Fannie Mae may charge a compensatory
      fee in any of the following situations when it feels the imposition of a fee
      — which gives the servicer a ﬁnancial incentive to correct its servicing problems
      — will improve the quality of the servicer’s performance. The following table
      describes some of the types of compensatory fees Fannie Mae may charge and the
      calculation of the relevant compensatory fee. Compensatory Fee Category Calculation
      of the Compensatory Fee Delayed remittance of claim proceeds In some cases,
      MI claim settlements serviced under the special servicing option are sent directly
      to the servicer in error. The servicer must remit the claim proceeds to Fannie
      Mae within the required time frames outlined in F-1-06, Filing an MI Claim for
      a Liquidated Mortgage Loan or Acquired Property. If the servicer does not remit
      the claim proceeds timely, Fannie Mae may impose a daily interest charge until
      it does receive them. This interest charge will be calculated at the prime rate
      that was in eﬀect on the ﬁrst business day of the month in which the remittance
      was due (as published in The Wall Street Journal’s prime rate index), plus 3%.
      Published May 13, 2026 53 Compensatory Fee Category Calculation of the Compensatory
      Fee Late conﬁrmation of REOgram The servicer must notify Fannie Mae of an acquired
      property in accordance with E-4.1-01, Notifying Fannie Mae of an Acquired Property.
      If Fannie Mae does not receive the REOgram conﬁrmation as required, Fannie Mae
      may charge the servicer $100 a day until it does receive it. Fannie Mae will
      not enforce this fee if the servicer provides a reasonable explanation for the
      delay; however, the servicer must indemnify and hold Fannie Mae harmless against
      all Fannie Mae losses that result from its failure to submit the information
      to Fannie Mae in a timely manner. Unauthorized transfer of servicing The servicer
      must obtain Fannie Mae’s prior approval of any transfer of servicing or subservicing
      as outlined in A2-7-03, Post-Delivery Servicing Transfers. If a servicer fails
      to obtain Fannie Mae’s prior approval of any transfer of servicing, Fannie Mae
      may assess a compensatory fee that can vary depending on the circumstances and
      exercise any other available remedy; however, it will not exceed 1% of Fannie
      Mae’s share of the aggregate UPB of the applicable mortgage loans being transferred.
      Published May 13, 2026 54 Compensatory Fee Category Calculation of the Compensatory
      Fee Late remittance of monthly collections The servicer must remit funds to
      Fannie Mae as outlined in the Investor Reporting Manual. If the servicer does
      not remit the funds or does not remit the funds when due, Fannie Mae may (in
      addition to exercising its other available remedies) charge the compensatory
      fees outlined in the following table to cover Fannie Mae’s internal administrative
      costs and risk. Delayed Remittance Formula for Calculation of Compensatory Fee
      Compensatory Fees Not Less Than First Instance 1. Multiply the calculated late
      remittance by the number of days the remittance is late, and then 2. Multiply
      that product by the sum of the prime interest rate*, plus 3%. In any given month,
      not less than $250. Second Instance (if it occurs within one year of the ﬁrst
      instance) 1. Multiply the calculated late remittance by the number of days the
      remittance is late, and then 2. Multiply that product by the sum of the prime
      interest rate*, plus 3%. In any given month, not less than $500. Subsequent
      Instances (if they occur within one year of most recent instance) 1. Multiply
      the calculated late remittance by the number of days the remittance is late,
      and then 2. Multiply that product by the sum of the prime interest rate*, plus
      3%. In any given month, not less than $1,000. *Prime interest rate as published
      in The Wall Street Journal’s prime rate index. Published May 13, 2026 55 Compensatory
      Fee Category Calculation of the Compensatory Fee Excessive amount of delinquent
      installments Fannie Mae evaluates the servicer’s delinquencies for actual/actual
      remittance type mortgage loans to determine their eﬀect on its cash ﬂow. In
      any given month, Fannie Mae may compare the amount of past due installments
      for the delinquencies the servicer reports to Fannie Mae to the total installments
      for all of the mortgage loans in its Fannie Mae servicing portfolio. If this
      ratio is too high, Fannie Mae will work with the servicer to establish a goal
      for improvement and a time frame for accomplishing the goal. If the goal is
      not met within the established time frame, Fannie Mae may charge the servicer
      a compensatory fee on that portion of the goal that is not met. Generally, the
      fee will be calculated at the prime rate that was in eﬀect on the ﬁrst business
      day of the month in which the remittance was due (as published in The Wall Street
      Journal’s prime rate index), plus 3%. Fannie Mae may continue to charge a compensatory
      fee until the goal is met or until it becomes evident that Fannie Mae must consider
      more serious disciplinary actions, and may charge a higher compensatory fee
      as well. Late submission of annual ﬁnancial statements/reports The servicer
      must submit its annual ﬁnancial statements to Fannie Mae or Fannie Mae may charge
      a compensatory fee, as outlined in Selling Guide A4-1-02, Submission of Financial
      Statements and Reports. Published May 13, 2026 56 Compensatory Fee Category
      Calculation of the Compensatory Fee Late or inaccurate submission of delinquency
      status information or Fannie Mae investor reporting system reports The servicer
      must submit Fannie Mae investor reporting system reports as required in the
      Investor Reporting Manual and delinquency status information as outlined in
      D2-4-01, Reporting a Delinquent Mortgage Loan to Fannie Mae and F-1-21, Reporting
      a Delinquent Mortgage Loan via Fannie Mae’s Servicing Solutions System. If the
      servicer fails to submit accurate and properly formatted information by the
      required deadlines, Fannie Mae may assess compensatory fees to compensate for
      Fannie Mae’s internal administrative costs as outlined in the following table.
      Note: Reporting of delinquency status information and Fannie Mae investor reporting
      system reports are independent monthly reporting activities, separately subject
      to compensatory fees. Late or Inaccurate Monthly Reporting Compensatory Fee
      First Instance Greater of $250 or $50 per mortgage loan up to a maximum of $5,000
      Second Instance Greater of $500 or $50 per mortgage loan up to a maximum of
      $10,000 Each Subsequent Instance (if it occurs within one year of the most recent
      prior instance) Greater of $1,000 or $50 per mortgage loan up to a maximum of
      $15,000 Fannie Mae reserves the right to elect instead of to hold the servicer
      liable for actual damages. Instances of late reporting include, but are not
      limited to • Failure to Comply with Reporting Deadlines - The servicer must
      comply with the reporting time frames outlined in D2-4-01, Reporting a Delinquent
      Mortgage Loan to Fannie Mae, F-1-21, Reporting a Delinquent Mortgage Loan via
      Fannie Mae’s Servicing Solutions System, and the Investor Reporting Manual,
      as applicable. • Untimely Reporting of ARM Loan Conversions – The servicer must
      provide information about the conversion when it submits its monthly Fannie
      Mae investor reporting system reports to Fannie Mae as required by the Investor
      Reporting Manual. • Delayed Remittance of Collections – The servicer must comply
      with the reporting time frames outlined in the Investor Reporting Manual. Recent
      Related Announcements The table below provides references to recently issued
      Announcements that are related to this topic. Published May 13, 2026 57 Announcements
      Issue Date Announcement SVC-2022-08 December 21, 2022 Announcement SVC-2021-04
      July 14, 2021'
  judgment: false
