FNMA Servicing Guide A1-4 — Breach of Contract and Nonperformance

fnma-svc-a1-4

Servicing Guide Chapter A1-4 defines what constitutes a breach of the servicer's contractual obligations, the remedies Fannie Mae may exercise, and the imposition of compensatory fees.

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source:
  type: regulation
  id: fnma-svc-a1-4
  authority: FNMA Servicing Guide A1-4 — Breach of Contract and Nonperformance
  description: |
    Servicing Guide Chapter A1-4 defines what constitutes a breach of the servicer's contractual obligations, the remedies Fannie Mae may exercise, and the imposition of compensatory fees.
obligations:
  - id: fnma-svc-a1-4-custodial-deposit-first-business-day
    canonical_id: fnma-svc-a1-4-custodial-deposit-first-business-day
    section: FNMA Servicing Guide A1-4.1-01 — Defining a Breach of Contract
    description: |
      [LENDER], as servicer, must deposit all funds collected for the mortgage
      loans into the proper custodial account not later than the first business
      day following their receipt, and must remit all funds due Fannie Mae
      within the required time frames; failure to do so constitutes a breach
      of the Lender Contract and exposes [LENDER] to Fannie Mae's remedies
      (indemnification, repurchase, make-whole, compensatory fees).
    type: do
    audit_question: Can [LENDER] evidence that all funds collected for Fannie Mae mortgage loans are deposited into the proper custodial account no later than the first business day following receipt, and that all funds due Fannie Mae are remitted within the required time frames?
    program_review: Does the program ensure all funds collected are deposited to the proper custodial account no later than the first business day after receipt, and all funds due Fannie Mae are remitted within the required timeframes (failure = breach)?
    file_review: Sample collection/deposit records; confirm first-business-day custodial deposit and timely remittance to Fannie Mae.
    judgment: false
    feeds: []
    workflow_phase: servicing
    owner_role: default_servicing_analyst
    secondary_owner_role: compliance_officer
    cadence: continuous
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - fnma
      - servicing-guide
      - breach-of-contract
      - custodial-account
      - promoted
    primary_source:
      tier: 1
      authority: FNMA Servicing Guide A1-4.1-01 — Defining a Breach of Contract
      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: |-
        the failure to deposit all funds collected for the mortgage loans into the proper custodial
        account not later than the first business day following their receipt, or
        the failure to remit all funds due Fannie Mae within the required time frames;
      drafter_attestation: |
        Copied verbatim from FNMA Servicing Guide snapshot cf63a82bbb4adfba (chapter A1-4) at 2026-05-22.
      glyphs_normalized: true
    promoted_at: '2026-05-23T00:25:08+00:00'
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  - id: fnma-svc-a1-4-diligent-default-action
    canonical_id: fnma-svc-a1-4-diligent-default-action
    section: FNMA Servicing Guide A1-4.1-01 — Defining a Breach of Contract
    description: |
      [LENDER] must take prompt and diligent action consistent with applicable
      law to collect sums past due on mortgage loans and to take any other
      diligent action that Fannie Mae or acceptable industry practice
      reasonably requires with respect to mortgage loans that are in default,
      including diligent action consistent with applicable law to foreclose
      any mortgage loan that is in default.
    type: do
    audit_question: For every delinquent Fannie Mae mortgage loan, can [LENDER] evidence prompt and diligent collection action consistent with applicable law, and for loans in default, can [LENDER] evidence diligent action to foreclose consistent with Fannie Mae timelines and applicable law?
    program_review: Does the program facilitate prompt, diligent, law-consistent action to collect past-due sums and, for defaulted loans, diligent action to foreclose per FNMA timelines and applicable law?
    file_review: Review delinquent/default file notes for prompt diligent collection and foreclosure action; the compliance person judges whether the action was diligent and law-consistent.
    judgment: true
    feeds: []
    workflow_phase: servicing
    owner_role: default_servicing_analyst
    secondary_owner_role: foreclosure_specialist
    cadence: per-default-event
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - fnma
      - servicing-guide
      - breach-of-contract
      - diligence
      - default
      - promoted
    primary_source:
      tier: 1
      authority: FNMA Servicing Guide A1-4.1-01 — Defining a Breach of Contract
      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: the failure to take prompt and diligent action consistent with applicable law to collect sums past due on the mortgage loans or to take any other diligent action that Fannie Mae or acceptable industry practice reasonably requires with respect to mortgage loans that are in default; or the failure to take diligent action consistent with applicable law to foreclose any mortgage loan that is in default, whether or not resulting from the acts or omissions of a law firm or other person or entity the servicer chooses to effect such foreclosure.
      drafter_attestation: |
        Copied verbatim from FNMA Servicing Guide snapshot cf63a82bbb4adfba (chapter A1-4) at 2026-05-22.
      quote_healed: true
      glyphs_normalized: true
    promoted_at: '2026-05-23T00:25:08+00:00'
    promoted_from: fnma-svc-a1-4-roundb-v1.yaml
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  - promoted_at: '2026-05-23T00:25:08+00:00'
    candidate_path: C:\Users\earlc\broker-tools\obligations\_remediation\_round_b_drafts\fnma-svc-a1-4-roundb-v1.yaml
    candidates_promoted: 2
    candidates_skipped_existing: 0

Verbatim regulatory text (2)

Verbatim provisions from FNMA Servicing Guide A1-4 — Breach of Contract and Nonperformance — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.

FNMA Servicing Guide A1-4.1-01 — Defining a Breach of Contract

the failure to deposit all funds collected for the mortgage loans into the proper custodial account not later than the first business day following their receipt, or the failure to remit all funds due Fannie Mae within the required time frames;

Source: FNMA Servicing Guide A1-4.1-01 — Defining a Breach of Contract · source URL · snapshot cf63a82bbb4adfba

FNMA Servicing Guide A1-4.1-01 — Defining a Breach of Contract

the failure to take prompt and diligent action consistent with applicable law to collect sums past due on the mortgage loans or to take any other diligent action that Fannie Mae or acceptable industry practice reasonably requires with respect to mortgage loans that are in default; or the failure to take diligent action consistent with applicable law to foreclose any mortgage loan that is in default, whether or not resulting from the acts or omissions of a law firm or other person or entity the servicer chooses to effect such foreclosure.

Source: FNMA Servicing Guide A1-4.1-01 — Defining a Breach of Contract · source URL · snapshot cf63a82bbb4adfba

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Source of record: https://claudeforcompliance.com/regs/fnma-svc-a1-4/ · register fnma-svc-a1-4 · Claude for Compliance. Free to read and download; see regulatory updates and methodology.