A2-3-04, Late Charges as Compensation (12/11/2019)

The servicer may collect late charges, and if it does, it must do so in compliance with the requirements set forth in Selling Guide B8-3-02: Special Note Provisions and Language Requirements. Also, see C-1.1-01, Servicer Responsibilities for Processing Mortgage Loan PaymentsC-1.1-01, Servicer Responsibilities for Processing Mortgage Loan Payments for Fannie Mae requirements regarding application of payments, including late charges.

The servicer must report the amount of late charges it collects each month for a given mortgage loan as part of the monthly activity information it provides through Fannie Mae’s investor reporting system. See the Investor Reporting Manual for additional information.