Lender Letter LL-2025-01 Updates to the Foreclosure Time Frames and Compensatory Fee Allowable Delays Exhibit

Impact. This Fannie Mae guidance revises foreclosure timing requirements and compensatory fee structures that servicers must follow when managing defaulted loans in their GSE portfolio. Your default management teams will need to recalibrate workflow timelines, adjust fee calculations, and retrain staff on the new procedural standards before the July effective date.

Risk. Foreclosure counsel and default management staff are most exposed here, as outdated timing assumptions could trigger GSE compensatory fees or servicing guide violations during examinations. The operational risk concentrates in workflow coordination between internal teams and external counsel who may not immediately adapt to the revised timeframes.

Recommended Action. Default Management should immediately obtain the updated exhibit and conduct a gap analysis against current foreclosure procedures, then schedule coordination meetings with primary foreclosure counsel to align on the new timing requirements. Legal should review borrower communication templates to ensure timeline disclosures remain accurate under the revised standards.

Watch. Monitor for additional GSE guidance clarifying implementation details or fee calculation methodologies as the July effective date approaches, and track whether Freddie Mac issues corresponding updates to maintain consistency across GSE servicing requirements.