Section 408

Delivery Failure

Requirements

Neither you nor the BorrowerBorrowerPerson who is the obligor per the Note. may profit from a failed DeliveryDeliverySubmission of all correct, accurate, and certifiable documents, data, and information with all applicable documents properly completed, executed, and recorded as needed, and any deficiencies resolved to Fannie Mae’s satisfaction. .

Operating Procedure

Fannie Mae may take certain actions if the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. DeliveryDeliverySubmission of all correct, accurate, and certifiable documents, data, and information with all applicable documents properly completed, executed, and recorded as needed, and any deficiencies resolved to Fannie Mae’s satisfaction.

  • does not occur by the DeliveryDeliverySubmission of all correct, accurate, and certifiable documents, data, and information with all applicable documents properly completed, executed, and recorded as needed, and any deficiencies resolved to Fannie Mae’s satisfaction. deadline, and
  • this failure results in Fannie Mae being unable to
    • settle the MBSMBSMortgage-Backed Security by the Rate LockRate LockAgreement between you and the Investor containing the terms of the Lender-Arranged Sale or Multifamily Trading Desk trade of the Mortgage Loan and the MBS terms and conditions relating to the underlying MBS, if applicable, which may be documented via a recorded telephone conversation. expiration date for an MBS Mortgage LoanMBS Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for an issued MBS backed by the Mortgage Loan. , or
    • purchase the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. by the earlier of the Rate LockRate LockAgreement between you and the Investor containing the terms of the Lender-Arranged Sale or Multifamily Trading Desk trade of the Mortgage Loan and the MBS terms and conditions relating to the underlying MBS, if applicable, which may be documented via a recorded telephone conversation. expiration date or the CommitmentCommitmentContractual agreement between you and Fannie Mae where Fannie Mae agrees to buy a Mortgage Loan at a future date in exchange for an MBS, or at a specific price for a Cash Mortgage Loan, and you agree to Deliver that Mortgage Loan. expiration date for a Cash Mortgage LoanCash Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for cash. .
For MBS or Cash Trades... If you fail to Deliver the Mortgage Loan...

With the Multifamily Trading Desk

Fannie Mae will:

 

  • draft as Breakage FeesBreakage FeesAggregated costs and damages owed to the Investor if you fail to Deliver the Mortgage Loan Delivery Package per the Guide. , paid to the Multifamily Trading DeskMultifamily Trading DeskTeam that quotes interest rate pricing for a Mortgage Loan and can be contacted at (888) 889-1118. for the broken Rate LockRate LockAgreement between you and the Investor containing the terms of the Lender-Arranged Sale or Multifamily Trading Desk trade of the Mortgage Loan and the MBS terms and conditions relating to the underlying MBS, if applicable, which may be documented via a recorded telephone conversation. , an amount equal to:
    • the Minimum Good Faith DepositMinimum Good Faith DepositAmount you are required to collect when originating a Mortgage Loan per Part IV, Chapter 2: Rate Lock and Committing, Section 203.02: Minimum Good Faith Deposit. from your account, retaining it as liquidated damages in full satisfaction of your Rate LockRate LockAgreement between you and the Investor containing the terms of the Lender-Arranged Sale or Multifamily Trading Desk trade of the Mortgage Loan and the MBS terms and conditions relating to the underlying MBS, if applicable, which may be documented via a recorded telephone conversation. obligations; or
    • for a Forward CommitmentForward CommitmentCommitment to purchase a permanent Mortgage Loan for a to-be constructed or rehabilitated Property. , per Part III, Chapter 20: Forward Commitments, Section 2003.02B: Fees; 
  • collect the Withdrawn Commitment Fee due to Fannie Mae per the Pricing MemoPricing MemoApplicable DUS Pricing Memo or non-DUS Pricing Memo communicating pricing for various products and features. ; and
  • return the Mortgage Loan DocumentsMortgage Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. to you or to an applicable warehouse lender.

 

This remedy will occur

 

  • after the Rate LockRate LockAgreement between you and the Investor containing the terms of the Lender-Arranged Sale or Multifamily Trading Desk trade of the Mortgage Loan and the MBS terms and conditions relating to the underlying MBS, if applicable, which may be documented via a recorded telephone conversation. expiration date or the CommitmentCommitmentContractual agreement between you and Fannie Mae where Fannie Mae agrees to buy a Mortgage Loan at a future date in exchange for an MBS, or at a specific price for a Cash Mortgage Loan, and you agree to Deliver that Mortgage Loan. expiration date, but
  • no sooner than the 2nd Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. after Fannie Mae sends you a notice of default.

 

If the Rate Lock PeriodRate Lock PeriodTime from Rate Lock execution through the Settlement Date. is more than 180 days, the Fannie Mae Multifamily Trading DeskMultifamily Trading DeskTeam that quotes interest rate pricing for a Mortgage Loan and can be contacted at (888) 889-1118. will determine any additional remedies at the time of Rate LockRate LockAgreement between you and the Investor containing the terms of the Lender-Arranged Sale or Multifamily Trading Desk trade of the Mortgage Loan and the MBS terms and conditions relating to the underlying MBS, if applicable, which may be documented via a recorded telephone conversation. .

For Lender-Arranged Sales

You must:

 

  • provide Fannie Mae with copies of the Third Party MBS Investor'sThird Party MBS Investor'sMBS Investor for an MBS Mortgage Loan that is not the Multifamily Trading Desk.
    • trading agreement for the failed DeliveryDeliverySubmission of all correct, accurate, and certifiable documents, data, and information with all applicable documents properly completed, executed, and recorded as needed, and any deficiencies resolved to Fannie Mae’s satisfaction. , including Breakage FeeBreakage FeeAggregated costs and damages owed to the Investor if you fail to Deliver the Mortgage Loan Delivery Package per the Guide. calculation methodology, and
    • Rate LockRate LockAgreement between you and the Investor containing the terms of the Lender-Arranged Sale or Multifamily Trading Desk trade of the Mortgage Loan and the MBS terms and conditions relating to the underlying MBS, if applicable, which may be documented via a recorded telephone conversation. agreement for the failed DeliveryDeliverySubmission of all correct, accurate, and certifiable documents, data, and information with all applicable documents properly completed, executed, and recorded as needed, and any deficiencies resolved to Fannie Mae’s satisfaction. ;
  • comply with the requirements of the Third Party MBS InvestorThird Party MBS InvestorMBS Investor for an MBS Mortgage Loan that is not the Multifamily Trading Desk. ;
  • protect and hold Fannie Mae harmless against all actions or costs that may result from not complying with Third Party MBS InvestorThird Party MBS InvestorMBS Investor for an MBS Mortgage Loan that is not the Multifamily Trading Desk. requirements; 
  • pay the Third Party MBS InvestorThird Party MBS InvestorMBS Investor for an MBS Mortgage Loan that is not the Multifamily Trading Desk. any Breakage FeesBreakage FeesAggregated costs and damages owed to the Investor if you fail to Deliver the Mortgage Loan Delivery Package per the Guide. , whether or not it holds the Good Faith DepositGood Faith DepositAmount you collect from the Borrower when originating a Mortgage Loan per ​Part IV, Chapter 2: Rate Lock and Committing, Section 203: Good Faith Deposits. you collected from the BorrowerBorrowerPerson who is the obligor per the Note. ; and
  • pay Fannie Mae:
    • the difference as a Breakage FeeBreakage FeeAggregated costs and damages owed to the Investor if you fail to Deliver the Mortgage Loan Delivery Package per the Guide. for the broken CommitmentCommitmentContractual agreement between you and Fannie Mae where Fannie Mae agrees to buy a Mortgage Loan at a future date in exchange for an MBS, or at a specific price for a Cash Mortgage Loan, and you agree to Deliver that Mortgage Loan. if the breakage fees paid to the Third Party MBS InvestorThird Party MBS InvestorMBS Investor for an MBS Mortgage Loan that is not the Multifamily Trading Desk. are less than the Minimum Good Faith DepositMinimum Good Faith DepositAmount you are required to collect when originating a Mortgage Loan per Part IV, Chapter 2: Rate Lock and Committing, Section 203.02: Minimum Good Faith Deposit. ; and 
    • any Withdrawn Commitment Fee due per the Pricing MemoPricing MemoApplicable DUS Pricing Memo or non-DUS Pricing Memo communicating pricing for various products and features. . 

If Fannie Mae does not purchase the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. , the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. documents will be returned to you or to an applicable warehouse lender.