Fannie Mae issued new policy guidelines this week that told servicers they can no longer name MERS as a plaintiff in foreclosure actions on a mortgage loan owned or securitized by the GSE.
“…the system has become the centerpiece of a number of lawsuits, with foreclosed homeowners challenging the naming of the electronic system as mortgagee.
Fannie Mae stated in its new servicing guidelines that when MERS is listed as the mortgagee of record, the servicer must prepare a mortgage assignment transferring the position from MERS back to the servicer, and then bring the foreclosure in its own name.
In the event that the GSE requires the foreclosure be brought in the name of Fannie Mae, the servicer must conduct that transfer assignment as well. In all cases, the assignment from MERS to the servicer or Fannie Mae must be recorded before the foreclosure begins.
“Fannie Mae will not reimburse the servicer for any expense incurred in preparing or recording an assignment of the mortgage loan from MERS to the servicer or to Fannie Mae,” the guidelines read.”
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