Section 423
| 423.01 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must establish a written policy for maturing Mortgage LoansMortgage LoansMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. , including:
- overall monitoring responsibilities;
- criteria for handoffs between functional groups (e.g., Special Asset ManagementSpecial Asset ManagementTeam performing Fannie Mae’s Special Servicing that can be contacted at [email protected]. , Special Credits, etc.);
- Fannie Mae reporting;
- sending BorrowerBorrowerPerson who is the obligor per the Note. maturity notification letters; and
- determining the Mortgage Loan’sMortgage Loan’sMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. refinance eligibility.
| 423.02 | |
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On a monthly basis, beginning at least 24 months before each Mortgage Loan’sMortgage Loan’sMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must evaluate the Property’sProperty’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). operating performance to determine the likelihood that 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. UPBUPBUnpaid Principal Balance can be refinanced based on the current cap rate, and the DSCRDSCROn an annual basis or any specified period, the ratio of Net Cash Flow to the total of: principal, interest, and required Mezzanine Financing or Hard Preferred Equity payments. and NCFNCFOn an annual basis or any specified period, the total Net Operating Income, minus the full amount underwritten for Replacement Reserve expense, regardless of whether deposits will be made (per Part II, Chapter 2: Valuation and Income, Section 203: Income Analysis and the applicable products and… from the Property’sProperty’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). most recent annual financial statement.
Participants from the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. underwriting, asset management, portfolio management, and finance teams must coordinate to categorize each 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. as either:
- “Meets Criteria” = 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. qualifies for refinancing based on the currently published underwriting criteria of Fannie Mae or a third party; or
- “Does Not Meet Criteria” = 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. does not qualify for refinancing based on the currently published underwriting criteria of Fannie Mae or a third party.
For each 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. categorized as “Does Not Meet Criteria”, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- review the Property’sProperty’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). quarterly operating statements and analyze the operating expenses (especially repairs & maintenance and capital expenses) to assess whether the BorrowerBorrowerPerson who is the obligor per the Note. is prudently managing the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). ; and
- work with the BorrowerBorrowerPerson who is the obligor per the Note. and Fannie Mae to ensure the BorrowerBorrowerPerson who is the obligor per the Note. has a reasonable payoff plan.
| 423.03 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must send the following maturity notification letters to the BorrowerBorrowerPerson who is the obligor per the Note. :
- 18 months before 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. Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , send the first maturity notification letter notifying the BorrowerBorrowerPerson who is the obligor per the Note. of the upcoming Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. (18 Month Notice to Borrower – Choice Refinance Loans (Form 4217)).
- 12 months before 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.
Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents.
, send the applicable second maturity notification letter (12 Month Notice to Borrower Marketing Oriented – Choice Refinance Loans (Form 4218) or 12 Month Notice to Borrower – In Place Loans (Form 4219)):
- notifying the BorrowerBorrowerPerson who is the obligor per the Note. of the upcoming Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. ;
- providing ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. contact information; and
- requesting a detailed payoff plan.
- 6 months before 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.
Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents.
, send the 6 Month Notice to Borrower – In Place Loans (Form 4220):
- notifying the BorrowerBorrowerPerson who is the obligor per the Note. of the upcoming Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. ;
- requesting proof of a payoff plan (e.g., a commitment letter from another lender or sale contract); and
- advising the BorrowerBorrowerPerson who is the obligor per the Note. that 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. will be in default if not paid off or refinanced.
Within 6 months of the Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must aggressively pursue a maturity solution for any 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. that “Does Not Meet Criteria” until the BorrowerBorrowerPerson who is the obligor per the Note. provides written proof of a payoff plan, which may include a certified escrow letter, contact information for the new lender with appropriate follow-up by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , or other reasonable evidence.
| 423.04 | |
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On the first 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. of each month, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a Maturing Loan Report using the mandated template to Multifamily Maturity ManagementMultifamily Maturity ManagementTeam that can be contacted at [email protected]. with information on each 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. maturing within the next 24 months (or advising that no Mortgage LoansMortgage LoansMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. are maturing within the next 24 months), and categorizing each as “Meets Criteria” or “Does Not Meet Criteria” in the Performance Rating column. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must also update the Maturing Loan Report as new information becomes available with each monthly submission.
The comments section of the Maturing Loan Report must include, at a minimum:
- a report of discussions with the BorrowerBorrowerPerson who is the obligor per the Note. (e.g., potential new lender, term of new loan, proof of payoff plan received);
- the anticipated payoff date; and
- whether 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. is likely or not to refinance, and the rationale.
All other Fannie Mae notices related to maturing Mortgage LoansMortgage LoansMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. , including default notices, must be sent to Multifamily Maturity ManagementMultifamily Maturity ManagementTeam that can be contacted at [email protected]. .