Fannie Mae has released Lender Letter 06-24  describing Fannie Mae's new policy related to foreclosure actions for mortgages in which Mortgage Electronic Registration Systems, Inc. ("MERS") is the mortgagee of record.

These changes are effective immediately for any foreclosure action initiated on or after publication of this Announcement (12/07/06).

Included in this Lender Letter:

Judicial Foreclosures:
Effective immediately, MERS must not be named as a plaintiff in any judicial action filed to foreclose on mortgages owned or securitized by Fannie Mae. The Letter further provides instructions for the mortgage assignment from MERS to the respective servicers or to Fannie Mae. Servicers are reminded to consult its foreclosure attorney to determine the specific legal requirements of each jurisdiction in which it conducts judicial foreclosures of mortgage loans in which MERS is the mortgagee of record.

• Non-Judicial Foreclosures:
  The servicer has the option of either assigning the mortgage from MERS to the servicer (in accordance with the process outlined in the Lender Letter for judicial foreclosures), or proceeding with the foreclosure with MERS as the mortgagee of record.
  The Letter further provides instructions for instances where MERS remains the mortgagee of record, regarding accurately identifying the status of MERS.
  In addition, 
  
• Guidance is provided if the borrower reinstates prior to foreclosure, but following the mortgage assignment from MERS to either the servicer or Fannie Mae.
  

• The servicer will not be reimbursed for any expense incurred in preparing or recording an assignment of the mortgage from MERS to the servicer or Fannie Mae.

• The provisions in the Servicing Guide addressing conveyance of properties when the foreclosure was conducted in the name of MERS, will continue to apply to any non-judicial foreclosure action completed in accordance with this Announcement and in which MERS remains the mortgagee of record.

Any questions regarding this Lender Letter should be directed to the respective Portfolio Manager or Servicing Consultant.

To view the Lender Letter in its entirety, please click here.