source:
  type: guide
  id: fnma-svc-e-5-07
  authority: Fannie Mae Servicing Guide E-5-07 — Other Reimbursable Default-Related
    Legal Expenses
  description: Fannie Mae Servicing Guide E-5-07 — Other Reimbursable Default-Related
    Legal Expenses.
  coverage_tier: operative
obligations:
- id: fnma-svc-e-5-07-full
  canonical_id: fnma-svc-e-5-07-full
  section: Fannie Mae Servicing Guide E-5-07 — Other Reimbursable Default-Related
    Legal Expenses
  type: do
  tags:
  - regulator-direct
  - fnma
  - servicing-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Servicing Guide E-5-07 — Other Reimbursable Default-Related
      Legal Expenses
    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-5-07, Other Reimbursable Default-Related Legal Expenses (03/08/2023)
      Introduction This topic contains the following: General Requirements for Default-Related
      Legal Costs Publication Costs Publication Placement Costs for Certain States
      Posting Costs for California Foreclosure Title Costs General Requirements for
      Default-Related Legal Costs Both the servicer and the law ﬁrm must make every
      eﬀort to reduce default-related legal expenses in a manner consistent with Fannie
      Mae’s guidelines and all applicable law. The servicer must attempt to minimize
      the costs incurred from vendors utilized by the law ﬁrm—such as auctioneers,
      process servers, title companies, posting companies, and newspapers or other
      publications—by ensuring that all costs are actual, reasonable, and necessary.
      The servicer and law ﬁrm must regularly examine the pricing oﬀered by alternative
      vendors and negotiate for the best value from the vendor and other qualiﬁed
      service providers. The servicer should ﬁle required court documents and record
      required legal documents with the county recorder or Land records oﬃce electronically,
      when possible. Fannie Mae will reimburse the servicer for the costs assessed
      by third-party vendors to electronically ﬁle or record default-related documents
      and records, even if a free paper-ﬁling option is available. However, the servicer
      must not request reimbursement from Fannie Mae for such vendor costs when an
      option to ﬁle or record electronically without vendor charges exists. Fannie
      Mae will reimburse the servicer for Fannie Mae’s share of any funds it advances
      for foreclosure expenses related to FHA, VA, and conventional mortgage loans
      (whether they are whole mortgage loans, participation Published May 13, 2026
      519 pool mortgage loans held in Fannie Mae''s portfolio, or special servicing
      MBS mortgage loans) and those related to special servicing option RD mortgage
      loans. Speciﬁcally, Fannie Mae will reimburse the servicer for the out-of- pocket
      costs that it pays to third-party vendors or the courts, which are listed in
      Deﬁned Expense Reimbursement Limits in F-1-05, Expense Reimbursement and provided
      the costs are actual, reasonable, and necessary (and are included in any applicable
      FHA, VA, RD, or MI claim that is ﬁled). To request reimbursement for these items,
      the servicer must follow the procedures in Reimbursement for Other Reimbursable
      Expenses in F-1-05, Expense Reimbursement. Fannie Mae prior approval is required
      in order for Fannie Mae to reimburse the servicer for excess foreclosure title
      update costs and excess foreclosure sale publication costs, as further outlined
      in Publication Costs and Foreclosure Title Costs below. The law ﬁrm retained
      by the servicer must obtain the appropriate approval from Fannie Mae when required
      for these excess costs and provide supporting documentation and explanation
      to warrant the request. Lack of suﬃcient supporting documentation and explanation
      could result in an automatic denial. Unexpected events which may require additional
      title updates or additional publication costs beyond what is included in a routine
      foreclosure action include, but are not limited to, the following: a scheduled
      foreclosure sale is continued or rescheduled; complete restart of the foreclosure
      action if the prior foreclosure sale was already scheduled; and non-standard
      reasons, such as probate, non-routine litigation, or other legal actions. Fannie
      Mae has a process in place for law ﬁrms to request appropriate approval for
      excess title and publication costs. The servicer must comply with the instructions
      shown in the following table to obtain reimbursement for these additional costs.
      ✓ The servicer must... Require the law ﬁrm to have a process in place to request
      approval for reimbursable excess title and publication costs from Fannie Mae''s
      Single Family Servicing (see F-4-02, List of Contacts). Verify the reason for
      the additional costs are necessary due to an unexpected event. Fannie Mae will
      generally reimburse the servicer for excess title and publication costs if they
      are necessary due to unexpected events, unless they are due to a breach or alleged
      breach of selling warranties or representations or origination or selling activities,
      the lender’s failure or alleged failure to satisfy its duties and responsibilities
      as a servicer, actual or alleged error or lack of diligence on the part of a
      law ﬁrm retained by the servicer, or a servicer initiated ﬁle transfer to a
      new law ﬁrm. The servicer must reimburse the law ﬁrm in a timely manner for
      the additional legal costs associated with the services provided in the above
      instances unless the excess title or publication costs are due to actual or
      alleged error or lack of diligence from the law ﬁrm retained by the servicer.
      Published May 13, 2026 520 The servicer may access additional resources on managing
      default-related legal services, including title and foreclosure publication
      costs and the process for the law ﬁrm to request Fannie Mae approval for certain
      excess legal expenses, on Fannie Mae’s website. Publication Costs Publication
      costs may be reduced through more eﬃcient use of the print media. For example,
      in publishing a legal advertisement, the law ﬁrm must substitute a reference
      to the mortgage loan for the full legal description of the property — if doing
      so will not aﬀect the validity of the foreclosure sale. Similarly, in some circumstances,
      costs may be managed by ensuring that an advertisement is not typeset or spaced
      in a manner that increases the costs with no apparent additional beneﬁt. Online
      or alternative publications may be used to reduce the costs of publication,
      if allowed by applicable state laws. Fannie Mae will reimburse the servicer,
      without prior approval, for costs paid to a newspaper to publish all required
      documents necessary to complete a typical, uninterrupted foreclosure action.
      In the event a foreclosure sale is rescheduled or the foreclosure is restarted
      and there is a subsequent sale date scheduled during the life of the default,
      Fannie Mae prior approval is required for additional publication costs associated
      with each new sale date. See also General Requirements for Default-Related Legal
      Costs for further details. The servicer must also comply with the following
      requirements for publication costs. ✓ The servicer must... Require the law ﬁrm
      to retain receipts from the newspaper or publication as well as any receipts
      from any publication vendor. Ensure that no costs for publication placement
      services, such as costs related to publication price negotiation, placement,
      typesetting, follow-up, or advertisement tracking, are passed through to the
      borrower, the servicer, or Fannie Mae. Note: See Publication Placement Costs
      for Certain States for reimbursement of certain publication placement costs
      for speciﬁc states. Ensure that only the actual cost of the newspaper or publication
      reduced by all discounts, rebates, refunds, commissions, and other similar items
      of any kind is passed through to the borrower, the servicer, or Fannie Mae.
      Ensure that the law ﬁrm and any publication vendor used by the law ﬁrm are •
      passing along for the beneﬁt of the borrower, the servicer, and Fannie Mae any
      available discounts, rebates, refunds, commissions, or other similar items of
      any kind; and • utilizing the lowest cost newspaper or other publication that
      meets the requirements of applicable law, taking into account the frequency
      of publication. Published May 13, 2026 521 ✓ The servicer must... Reimburse
      the law ﬁrm in a timely manner for excess publication costs related to postponed
      or restarted foreclosure sales regardless of whether Fannie Mae prior approval
      is provided unless the reason for the restart or the postponement is due to
      actual or alleged error or lack of diligence on the part of a law ﬁrm by the
      servicer. Publication Placement Costs for Certain States Fannie Mae will reimburse
      the servicer an allowable publication placement cost to compensate the law ﬁrm
      for the negotiation of pricing (including any available discounts, rebates,
      refunds, commissions, or other similar items of any kind), placement, typesetting,
      follow-up, advertisement tracking, and all other related publication placement
      services for foreclosure referrals in the following states: Alaska Arizona California
      Nevada Oregon Washington Fannie Mae will reimburse the allowable cost once for
      each foreclosure referral in the applicable jurisdictions regardless of the
      number of advertisements. Fannie Mae will not pay excess publication placement
      costs in the event a sale is continued or restarted and these costs are not
      eligible for submission to Fannie Mae for excess cost review. The following
      table provides a list of servicer requirements related to publication placement
      costs for these states. ✓ The servicer must... Compensate the law ﬁrm for performing
      the publication placement services even if the law ﬁrm does not use a third-party
      publication vendor. Ensure that the publication placement cost is coded as non-recoverable
      from the borrower and that no additional publication vendor costs are passed
      through to the borrower, the servicer, or Fannie Mae. Request reimbursement
      for the publication placement cost as a separate item from the costs paid to
      the newspaper (or alternative publication) for publishing the advertisement.
      Published May 13, 2026 522 ✓ The servicer must... Require the law ﬁrm to notify
      the publication vendor that the publication relates to a Fannie Mae mortgage
      loan. Posting Costs for California Fannie Mae will reimburse the servicer an
      allowable posting cost per foreclosure referral for out of pocket costs paid
      to a third-party vendor to post the notice of foreclosure sale in California.
      This cost only covers the actual, reasonable, and necessary third-party vendor
      costs for posting the notice of foreclosure sale at the property and public
      place as required by applicable law. Foreclosure Title Costs Foreclosure-related
      title costs must be kept at a minimum and in compliance with Fannie Mae maximum
      allowable title costs. The maximum allowable title cost is the amount that Fannie
      Mae will reimburse the servicer for title costs incurred by the law ﬁrm retained
      by the servicer to handle Fannie Mae foreclosure matters. The following table
      provides the servicer with additional information regarding the requirements
      of a title search and related updates. ✓ Title Search and Update Requirements
      The maximum allowable foreclosure-related title cost includes: • an initial
      two-owner title search dating back to the deed prior to the mortgagor’s deed,
      • up to three title updates to the initial title search that are required and
      necessary to complete the foreclosure sale, and • complete copies of all documents
      and a summary page. Unless speciﬁed by Fannie Mae, the initial title search
      must be an uninsured title search without additional charges for insurance or
      guarantees. The title search and any required updates must conﬁrm title to the
      property and identify all recorded liens and documents aﬀecting title and all
      parties that must receive notice of the foreclosure sale. Review of the title
      report is included in the Fannie Mae maximum allowable foreclosure attorney
      fee and should not be added to the title cost. Fannie Mae will not reimburse
      the servicer for title searches in excess of a two- owner search or for costs
      to correct title defects that are covered by selling representations or warranties.
      The servicer must reimburse the law ﬁrm for foreclosure-related title costs
      associated with: Published May 13, 2026 523 additional title work the servicer
      requires the law ﬁrm to run for a more detailed title search in excess of two-owner,
      and fees and costs to correct title defects that are covered by selling representations
      or warranties. Recent Related Announcements The table below provides references
      to recently issued Announcements that are related to this topic. Announcements
      Issue Date Announcement SVC-2023-01 March 8, 2023 Announcement SVC-2022-08 December
      21, 2022 Published May 13, 2026 524 Part F, Servicing Guide Procedures, Exhibits,
      and Quick Reference Materials Introduction This part contains reference materials
      to support this Published May 13, 2026 525 Chapter F-1, Servicing Guide Procedures
      Introduction This chapter provides resources to support this Guide.'
  judgment: false
