711.05

Course of Action - Foreclosure

LENDER PURCHASE OF A SECURITIZED MORTGAGE LOAN IS NOT PERMITTED UNLESS THE MORTGAGE LOAN HAS BEEN DELINQUENT FOR FOUR CONSECUTIVE MONTHS.  ONLY AFTER THE PASSAGE OF SUCH FOUR CONSECUTIVE MONTH DELINQUENCY PERIOD MAY THE MORTGAGE LOAN BE REMOVED FROM THE SECURITY TRUST.  A DELINQUENT MORTGAGE LOAN MUST BE REMOVED FROM THE SECURITY TRUST NOT LATER THAN 24 MONTHS AFTER INITIAL DELINQUENCY.
711.05A

Primary Risk Mortgage Loans

Unless one of the other Courses of ActionCourses of ActionFor Non-Performing Mortgage Loans, loss mitigation activities per Part V: Servicing and Asset Management, Chapter 7. described in this Section has been selected, Fannie Mae will instruct outside counsel to vigorously pursue a foreclosure, following the foreclosure process described under Track Two of the Dual Track Approach in Part V, Chapter 7: Non-Performing Mortgage Loans, Section 712: Dual Track Approach.

711.05B

Secondary Risk Mortgage Loans

Unless one of the other Courses of ActionCourses of ActionFor Non-Performing Mortgage Loans, loss mitigation activities per Part V: Servicing and Asset Management, Chapter 7. described in this Section has been selected and, if part of a SWAT approved by Fannie Mae, the Special ServicerSpecial ServicerServicer (which may be Fannie Mae, the Servicer, or a third-party special servicer contracted by Fannie Mae) responsible for implementing the loss mitigation actions for a Non-Performing Mortgage Loan. will instruct outside counsel to vigorously pursue a foreclosure, following the foreclosure process described under Track Two of the Dual Track Approach in Part V, Chapter 7: Non-Performing Mortgage Loans, Section 712: Dual Track Approach.

If foreclosure is the approved Course of ActionCourse of ActionFor Non-Performing Mortgage Loans, loss mitigation activities per Part V: Servicing and Asset Management, Chapter 7. for a Non-PerformingNon-PerformingMortgage Loan that is subject to an uncured default. Secondary Risk Mortgage LoanSecondary Risk Mortgage LoanMortgage Loan where the Lender bears all losses until the Lender’s recourse obligations are exhausted. , the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. must purchase the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. from Fannie Mae.  Such purchase of the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. from Fannie Mae is not considered to be the exercise of the Course of ActionCourse of ActionFor Non-Performing Mortgage Loans, loss mitigation activities per Part V: Servicing and Asset Management, Chapter 7. set forth in Part V, Chapter 7: Non-Performing Mortgage Loans, Section 711.02: Course of Action – Lender Purchase of Mortgage Loan, but is part of the foreclosure Course of ActionCourse of ActionFor Non-Performing Mortgage Loans, loss mitigation activities per Part V: Servicing and Asset Management, Chapter 7. under this Part V, Chapter 7: Non-Performing Mortgage Loans, Section 711.05: Course of Action - Foreclosure and is to permit the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. to credit bid at the foreclosure sale and/or if the winning bidder, to permit the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. to hold title to and operate the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). in the name of the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. or its designee.  In connection with exercising the foreclosure Course of ActionCourse of ActionFor Non-Performing Mortgage Loans, loss mitigation activities per Part V: Servicing and Asset Management, Chapter 7. , the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. must purchase the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. under one of the following options, either of which must be identified in the SWAT submitted to Fannie Mae.

1.  Purchase Prior to Foreclosure

The LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. may purchase the Non-PerformingNon-PerformingMortgage Loan that is subject to an uncured default. Secondary Risk Mortgage LoanSecondary Risk Mortgage LoanMortgage Loan where the Lender bears all losses until the Lender’s recourse obligations are exhausted. prior to foreclosure by:

  • indicating on the initial SWAT, or updated SWAT received by Fannie Mae no later than 10 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, a day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. before the proposed purchase date, that LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. has elected to purchase the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. prior to foreclosure, and identifying the anticipated purchase date;
  • purchasing, on the identified purchase date, the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. from Fannie Mae at the purchase price as calculated below in this Part V, Section 711.05.B;
  • purchasing the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. in the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. ’s own name (or the name of an affiliate as indicated on the approved SWAT), and thereafter implementing the foreclosure process in its own name;
  • within five Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, a day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. following receipt from the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. of the purchase price together with an original assignment of the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. , in recordable form, Fannie Mae will execute and return the original assignment, together with:
    • the original NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 (series), any other note approved by Fannie Mae, and all applicable addenda, schedules, and exhibits. endorsed, without recourse, representation or warranty, to the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. (or its affiliate);
    • the original Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. file; and
    • such other documents as necessary to fully assign, without recourse, representation or warranty, Fannie Mae’s interest in the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. to the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. (or its affiliate);
  • all documents delivered to Fannie Mae for execution shall be pursuant to Part V, Chapter 4: Asset Management: Loan Document Administration, Section 404.01: Submission of Documents to Fannie Mae;
  • after completion of the foreclosure, the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. or its affiliate will hold title to the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). until disposition;
    • the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. will continue to submit updated SWATs for Fannie Mae’s approval until disposition of the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). , at which time the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. will submit its Loss Notification Form (Form 4817) (as provided in the Lender’s ContractLender’s ContractProgram Documents per the Multifamily Selling and Servicing Agreement. ) to Fannie Mae; and
  • if the Non-PerformingNon-PerformingMortgage Loan that is subject to an uncured default. Secondary Risk Mortgage LoanSecondary Risk Mortgage LoanMortgage Loan where the Lender bears all losses until the Lender’s recourse obligations are exhausted. reinstates by the BorrowerBorrowerPerson who is the obligor per the Note. following the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. ’s purchase but prior to the foreclosure sale, the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. will not be entitled to credit any future losses on the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. against its recourse obligation.

2.  Purchase Immediately After Foreclosure

The LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. may purchase the Non-PerformingNon-PerformingMortgage Loan that is subject to an uncured default. Secondary Risk Mortgage LoanSecondary Risk Mortgage LoanMortgage Loan where the Lender bears all losses until the Lender’s recourse obligations are exhausted. immediately following foreclosure by:

  • indicating on the initial SWAT, or updated SWAT received by Fannie Mae no later than 60 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, a day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. before the foreclosure sale date, that LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. has elected to purchase the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. immediately following foreclosure (assuming Fannie Mae is the winning bidder at the foreclosure sale), and identifying the anticipated foreclosure sale date;
  • including with such SWAT an initial Asset Audit prepared no later than 60 days following the Date of DefaultDate of DefaultDate of the initial Payment Default or Performance Default, per Part V, Chapter 7: Non-Performing Mortgage Loans, Section 703: Mortgage Loan Defaults. , and providing to Fannie Mae a final and complete Asset Audit at least 60 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, a day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. prior to foreclosure;
  • no later than 10 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, a day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. prior to the foreclosure sale date, prepare and deliver to Fannie Mae an original Special Warranty Deed, in recordable form, and an escrow letter as provided below.  Fannie Mae will execute and deliver to an agreed-upon escrow agent, pursuant to escrow instructions also prepared by the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. , the Special Warranty Deed, together with (i) the original NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 (series), any other note approved by Fannie Mae, and all applicable addenda, schedules, and exhibits. endorsed, without recourse, representation or warranty, to the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. , and (ii) the original Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. file.  Such escrow letter must contain instructions that require the escrow agent, within five Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, a day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. following the foreclosure sale date, to either (a) deliver the Special Warranty Deed and other required documentation to LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. upon Fannie Mae’s confirmation of receipt of the purchase price or (b) return the original Special Warranty Deed and all other documentation to Fannie Mae;
  • all documents delivered to Fannie Mae for execution shall be pursuant to Part V, Chapter 4: Asset Management: Loan Document Administration, Section 404.01: Submission of Documents to Fannie Mae;
  • on the foreclosure sale date, the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. purchases the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). from Fannie Mae at the purchase price as calculated below in this Part V, Section 711.05.B;
  • the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. purchases the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. in its own name (or the name of an affiliate as indicated on the approved SWAT), and thereafter owns, operates and manages the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). until disposition;
  • the Special Warranty Deed from Fannie Mae must be filed of record immediately following the recording of the foreclosure or trustee’s deed into Fannie Mae; and
  • the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. will continue to submit updated SWATs for Fannie Mae’s approval until disposition of the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). , at which time the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. will submit its Loss Notification Form (Form 4817) to Fannie Mae.

3.  Purchase Price for Purchase Immediately Prior To or After Foreclosure

For Secondary Risk Mortgage LoansSecondary Risk Mortgage LoansMortgage Loan where the Lender bears all losses until the Lender’s recourse obligations are exhausted. purchased pursuant to this Section, unless otherwise provided in the Lender’s ContractLender’s ContractProgram Documents per the Multifamily Selling and Servicing Agreement. , the purchase or repurchase price will be equal to:

  • the then unpaid actual principal balance of the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. ; plus
  • interest as follows:
    • except for any Securitized Mortgage LoanSecuritized Mortgage LoanMortgage Loan backing an MBS, PFP MBS, or REMIC. , interest accrued through the purchase date; or
    • for any Securitized Mortgage LoanSecuritized Mortgage LoanMortgage Loan backing an MBS, PFP MBS, or REMIC. , interest for the entire month in which the purchase occurs based on the Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. remaining after applying the scheduled Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. payment due on the first day of that month; less
  • any Delinquency AdvanceDelinquency AdvanceFor Primary Risk Mortgage Loans and Secondary Risk Mortgage Loans, an amount advanced by a primary servicer in respect of regularly scheduled monthly interest or principal due on 1 or more Mortgage Loans, to the extent required under its Lender Contract.  For Secondary Risk Mortgage Loans only, in… made, but not reimbursed either by Fannie Mae or by or on behalf of the BorrowerBorrowerPerson who is the obligor per the Note. .
711.05C

Deed-in-Lieu of Foreclosure

Fannie Mae, in its sole discretion, may or may not elect to take a deed-in-lieu of foreclosure for any Primary RiskPrimary RiskMortgage Loan where Fannie Mae bears all losses or where the Lender and Fannie Mae share losses. or Secondary Risk Mortgage LoanSecondary Risk Mortgage LoanMortgage Loan where the Lender bears all losses until the Lender’s recourse obligations are exhausted. .

711.05D

Management of Property Post Title Vesting in Fannie Mae

If LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. has made a Deferred Asset Valuation Date Election under its Loss Sharing Addendum, and title to a PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). has vested in Fannie Mae, its affiliate or nominee as a result of a Foreclosure EventForeclosure EventAny of the following: Foreclosure under the Security Instrument; any other exercise by the Lender of rights and remedies (whether under the Security Instrument or under applicable law, including Insolvency Laws) as holder of the Mortgage Loan and/or the Security Instrument, as a result of… (as defined in the Loss Sharing Addendum) or other judicial process, Fannie Mae shall, except for matters relating to life/safety at the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). , consult with the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. for purposes of making joint decisions with the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. with respect to major decisions regarding the management and disposition of the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). , including but not limited to:

  • the timing and terms of listing the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). for sale;
  • the acceptance of terms of sale of the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). ;
  • any financing of the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). ;
  • approval of any business plan with respect to the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). ;
  • approval of each annual budget for the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). ;
  • any deviation from the approved budget by more than 20 percent with respect to any line item on a semi-annual basis;
  • approval and implementation of any rehabilitation or renovation plan with respect to the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). ;
  • any decision to and implementation of a plan to develop any or all of the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). ;
  • any capital expenditures in excess of $50,000 with respect to the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). ;
  • engagement of any professional advisors, other than in the ordinary course of business;
  • entering into any Material Commercial LeaseMaterial Commercial LeaseLease, sublease, license, concession, grant, or other possessory interest for commercial purposes that comprises 5% or more of the Property’s annual EGI, or relates to: solar power, thermal power generation, or co-power generation, or for the installation of solar panels or any other… of any space within a PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). , other than in the ordinary course of business;
  • commencement, institution or settlement of any legal proceedings with respect to the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). , other than eviction and termination proceedings in respect of tenant leases and other non-material legal proceedings for the collection of amounts due and owing from third parties and tenants undertaken in the ordinary course of business; and
  • the decision and implementation of any plan not to rebuild or restore the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). following any casualty or condemnation.

Any request by Fannie Mae with respect to a major decision shall be responded to in writing by the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. within two Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, a day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. of the making of such request.  Any request with respect to a major decision not responded to by the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. within two Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, a day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. shall be deemed approved.

711.05E

Deficiency Suits

1.  General

If a foreclosure sale is conducted with respect to a PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). , Fannie Mae shall determine whether to pursue a deficiency against the BorrowerBorrowerPerson who is the obligor per the Note. or pursue any guarantor who may have liability with respect to such Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. post-foreclosure or other final disposition of the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. (a “Deficiency Suit”), if such action is available under applicable state law.

Nothing in this Section E shall be deemed to relieve either LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. or Fannie Mae from any claims of indemnification under the terms of their ContractContractProgram Documents per the Multifamily Selling and Servicing Agreement. .

2.  Fannie Mae Deficiency Suit Election

If Fannie Mae elects to pursue a Deficiency Suit, and the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. ’s Allocable Percentage per the Loss Sharing Addendum with respect to the relevant Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. is greater than zero, the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. may elect to share in the cost and recovery related to such Deficiency Suit.  If the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. elects to participate in such Deficiency Suit, Fannie Mae shall bear 67 percent of the costs and expenses of such Deficiency Suit, and the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. shall bear 33 percent of the costs and expenses of such Deficiency Suit.  Likewise, any recovery resulting from the Deficiency Suit shall be shared 67 percent to Fannie Mae and 33 percent to the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. .

If Fannie Mae elects to pursue a Deficiency Suit, whether or not the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. elects to participate in such Deficiency Suit, Fannie Mae shall make all decisions in its sole and absolute discretion regarding such Deficiency Suit, including but not limited to, selection of counsel, election of venue, relief to be sought, and the settlement of the Deficiency Suit.

3.  Lender Deficiency Suit Election

If Fannie Mae elects not to pursue a Deficiency Suit following foreclosure, at the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. ’s request, Fannie Mae shall assign the Deficiency Suit to the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. , to the extent permitted by law and provided that such assignment shall be at no cost to Fannie Mae, and the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. may thereafter pursue such Deficiency Suit in its own name.  If the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. does pursue the Deficiency Suit, Fannie Mae may elect to participate in the cost and recovery of such Deficiency Suit.  All costs and expenses of such Deficiency Suit will be shared equally between the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. and Fannie Mae, and likewise, any recovery resulting from such Deficiency Suit shall be shared equally between the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. and Fannie Mae.

If Fannie Mae elects not to pursue a Deficiency Suit, and the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. elects to pursue such Deficiency Suit in its own name, LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. shall make all decisions in its sole and absolute discretion regarding such Deficiency Suit, including but not limited to selection of counsel, election of venue, relief to be sought, and the settlement of the Deficiency Suit.

4.  Costs and Expenses; Loss Sharing

If the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. and Fannie Mae are sharing the costs and expenses of any Deficiency Suit, the party prosecuting such Deficiency Suit shall submit copies of all invoices to the other party for reimbursement of the other party’s share of all costs and expenses incurred in connection with such Deficiency Suit.  Such invoices shall be submitted no more frequently than every three months and shall be paid within 30 days of receipt.

Any recovery resulting from a Deficiency Suit, regardless of whether Fannie Mae or the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. has participated in such Deficiency Suit, shall not affect the determination and payment of loss sharing pursuant to the Loss Sharing Addendum.

5.  Withdrawal from Deficiency Suit

If Fannie Mae and the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. are participating in a Deficiency Suit, either party may elect at any time to withdraw from the Deficiency Suit, in which case the withdrawing party shall be obligated to share the costs and expenses in the percentages set forth above through the date of its withdrawal.  The withdrawing party shall not participate in any recovery.