source:
  type: guide
  id: fnma-svc-a1-4.2-02
  authority: Fannie Mae Servicing Guide A1-4.2-02 — Compensatory Fees for Delays in
    the Liquidation Process
  description: Fannie Mae Servicing Guide A1-4.2-02 — Compensatory Fees for Delays
    in the Liquidation Process.
  coverage_tier: operative
obligations:
- id: fnma-svc-a1-4.2-02-full
  canonical_id: fnma-svc-a1-4.2-02-full
  section: Fannie Mae Servicing Guide A1-4.2-02 — Compensatory Fees for 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 A1-4.2-02 — Compensatory Fees for 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: 'A1-4.2-02, Compensatory Fees for Delays in the Liquidation Process
      (02/13/2019) Introduction This topic contains the following: Overview Assessing
      the Foreclosure Time Frame Calculating Compensatory Fees Overview Periodically,
      Fannie Mae reviews the servicer’s handling of seriously delinquent portfolio
      mortgage loans or MBS mortgage loans when serviced under the special servicing
      option to determine whether speciﬁc actions, such as referral to foreclosure,
      foreclosure sale, conveyance or claim ﬁling, are being taken in a timely manner.
      Fannie Mae reserves the right to review any seriously delinquent mortgage loan
      and pursue any remedy available to it for delays when it deems appropriate,
      which may be prior to or after the liquidation of the mortgage loan. If the
      servicer fails to complete a foreclosure action within the time frame prescribed
      by Fannie Mae, one of the remedies that Fannie Mae may pursue is the assessment
      of compensatory fees. If Fannie Mae selects compensatory fees as the appropriate
      remedy for delays in connection with a completed foreclosure, compensatory fees
      will be assessed if the entire period from the date the delinquency began, the
      LPI date, through the foreclosure sale date is longer than Fannie Mae’s allowable
      foreclosure time frame in the applicable jurisdiction as described in Assessing
      the Foreclosure Time Frame. This also includes foreclosure sales that result
      in a third-party sale. Fannie Mae has the right to rely on the delinquent mortgage
      loan status data submitted by the servicer as deﬁnitively and conclusively reﬂecting
      the status of a mortgage loan for purposes of the assessment and collection
      of compensatory fees for delays in liquidating delinquent mortgage loans. Accordingly,
      Fannie Mae may choose to reject any information provided by the servicer to
      support a status code that is diﬀerent from the one reported. The servicer’s
      failure to report on an accurate and timely basis and to otherwise comply with
      the requirements of the Servicing Guide may result in the imposition of compensatory
      fees separate from compensatory fees that may be imposed for foreclosure time
      frame non-compliance. See A1-4.2-01, Compensatory Fees Other Than Published
      May 13, 2026 58 Delays in the Liquidation Process for additional information.
      For mortgage loans with a foreclosure sale date on or after January 1, 2019,
      compensatory fees will be assessed if, after identiﬁcation of a chronic issue
      with a servicer’s compliance with foreclosure time frames, the servicer does
      not meet the terms of a performance improvement plan designed to remediate the
      issues as described in A1-1-03, Evaluating a Servicer’s Performance. Note: Servicers
      may be exempt from compensatory fee assessments based upon the number of mortgage
      loans serviced as well as the number of mortgage loans in excess of Fannie Mae’s
      allowable foreclosure time frame. These speciﬁc thresholds are determined as
      part of the STAR™ Program servicer inclusion criteria for time frame management.
      Fannie Mae may assess the servicer a compensatory fee of $1,000 for internal
      administrative costs plus any third-party costs if the servicer must rescind
      a foreclosure sale due to the servicer’s failure to follow Fannie Mae guidelines
      or other servicer error or alleged error. Fannie Mae will not reimburse foreclosure
      fees and costs that are required to complete a new foreclosure following rescission.
      Assessing the Foreclosure Time Frame When determining the servicer’s compliance
      with Fannie Mae’s time frames for completing foreclosure, adjustments are made
      for allowable delays. Allowable delays and the applicable number of days permitted
      for each delay are shown in the Foreclosure Time Frames and Compensatory Fee
      Allowable Delays Exhibit. See also E-3.2-15, Allowable Time Frames for Completing
      Foreclosure. Delays due to urgent or unforeseeable circumstances or for situations
      in which applicable law necessitates additional time may also be considered;
      however, such circumstances should be rare. Calculating Compensatory Fees Compensatory
      fees will be applied based on the UPB of the mortgage loan, the applicable PTR,
      the length of the delay, and any additional costs that are directly attributable
      to the delay. Fannie Mae assesses the servicer’s foreclosure time frame performance
      on a monthly basis at the mortgage loan level using the process in the following
      table. Step Calculating Compensatory Fees 1 a. Calculate the number of days
      the servicer took to complete the foreclosure process, from the LPI date through
      the foreclosure sale date. b. Determine if the days are in excess of the allowable
      time frame. 2 The compensatory fee for each mortgage loan will be calculated
      using • the UPB of the mortgage loan, • the applicable PTR, and • the number
      of days the mortgage loan exceeded the allowable time frame. Published May 13,
      2026 59 Note: A compensatory fee bill will be issued only for those servicers
      identiﬁed as having a chronic issue in meeting foreclosure time frames and only
      after the completion of a performance improvement plan. The total compensatory
      fee bill amount will be adjusted based on the results of the mortgage loan level
      review as described in A2-4-01, Quality Control Reviews and the servicer’s implementation
      of remediation under the performance improvement plan as described in A1-1-03,
      Evaluating a Servicer’s Performance. See F-2-03, Compensatory Fee Calculation
      Examples for examples that illustrate how compensatory fees are calculated.
      Recent Related Announcements The table below provides references to recently
      issued Announcements that are related to this topic. Announcements Issue Date
      Announcement SVC-2019-01 February 13, 2019 Subpart A2, Getting Started with
      Fannie Mae Chapter A2-1, Servicer Duties and Responsibilities Introduction This
      chapter contains information on servicer duties and responsibilities.'
  judgment: false
