TO:                 Regional and State Counsel

FROM:           Office of the Chief Underwriting Counsel

DATE:            June 12, 2009

SUBJECT:   Fannie Mae anti-flip restriction on REO conveyances

Fannie Mae has begun requiring agents who market its REO to include provisions in sales contracts that certain anti-flip language will be included in deeds. The language may vary, but is generally along the following lines:

Grantee herein shall be prohibited from conveying captioned property to a bonafide purchaser for value for a sales price of greater than ($_________ – 120% of sales price) for a period of one hundred and
eighty (180) days from the date of this deed. Grantee shall also be prohibited from encumbering subject

property with a security interest in the amount greater than ($______ =120% of sales price) for a
period of one hundred and eighty (180) days from the date of this deed. These restrictions shall run with the land and are not personal to grantee.