My Servicer Experiences during LLC Transfer (Part 2)

Continuing from my prior post: My Servicer Experiences during LLC Transfer (Part 1) TLDR: One of the top three mortgage Servicers by volume is being difficult and won't allow me to transfer a loan to my LLC, based on Fannie Mae's Servicing Guidelines section D1-4.1-02.  (If you're not aware of what that section refers to, read my original Post: How to Transfer Property to your LLC without fearing Due-on-Sale)

I took three parallel paths at this point:

1. 1. Kindly asked my Servicer to escalate.
   2. Filed a complaint with the Consumer Financial Protection Bureau (CFPB).
2. 3. Contacted Fannie's online customer service team to seek their advice.

A few days later, a call with my Servicer's Executive Escalation team did not go well:

• *The representative says, "The Executive Director of our internal team who works with Fannie Mae every single day confirmed that Fannie doesn't allow property transfer to an LLC."
  
• *Repeatedly, she refused to produce Fannie documentation to support their position.
• *She refused to examine the Fannie documentation I provided.
  
• *She refused to challenge the Executive Director's opinion.
  
• *She refused to let me talk to the Executive Director.
  
• *She refused any further escalation.
  
• *Her sole justification was, "This is the team that knows Fannie's rules, and transfers to LLC's aren't allowed. You'll have to refinance into a commercial loan."
  

I was hoping the CFPB complaint would be routed to a different team within the Servicer, maybe one with some teeth. Sadly, the Executive Escalation team handled the CFPB complaint and rapidly shut it down.

Fannie's online customer service rep provided a copy of their Guidelines and suggested that I file a complaint with a regulatory agency, i.e. the CFPB. Sooo...that's a dead-end.

A week later, I received the Servicer's metaphorical mic-drop in the mail:

(cue sad, dramatic music) Things were looking really bleak by this point. They're a multi-billion dollar company, CFPB and Fannie's online team didn't help, and I'm just one person who's without any recourse within the Servicer. Even with reason and logic on my side, overcoming the willful ignorance of this mortgage behemoth seemed daunting and unlikely.

But I can be persistent.

Remembering that old adage "pick up the phone", I called Fannie Mae.  (My previous interaction had been over email, and I suspected a live layer of support was worth a shot.)  I asked immediately for an escalation, which led to a glorious turnaround!.

With absolute certainty, the very pleasant agent with Fannie's escalation team
confirmed everything I thought to be true and that the transfer to my LLC should be allowed.  Without prompting, she volunteered to contact my Servicer to correct any misunderstanding, which earned her my Favorite Person award and a virtual hug.  Per their normal process, she had to give the Servicer 10 business days to respond.

Next I received the magical phone call from Fannie, "The Servicer will allow my property transfer per D1-4.1-02."  (Oh, how wonderful it might have been to be a fly on the wall in Fannie's conversation with the Servicer).

A week later, my metaphorical mic-drop appeared in the mail:

I completed the required Next Steps, and that was it.  Done.

Let's take a moment to reflect on what just happened: A lowly amateur investor goes up against a multi-billion dollar mortgage giant and triggers a massive process change internal to the Servicer that should benefit investors across the country.  Nice.

That concludes my Servicer saga.  Thank you if you made it all the way through.  Let this be definitive proof that it is possible to legally and responsibly transfer property to an LLC when Fannie owns the mortgage.

All we need now is for Freddy to also allow it...

(/sarcasm on) I'm patiently waiting for a phone call from my Servicer where I'm sure we'll discuss these topics:

1. 1. They apologize profusely for not staying current on rule changes.
2. 2. They thank me for correcting a massive gap in their understanding.
3. 3. I politely decline their job offer as the Executive Director of underwriting/servicing.

(/sarcasm off)