Section 601

Servicer Watchlist

601.01

Submission

Requirements

You must:

  • Maintain a ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. WatchlistWatchlistThe risk rating classification if you or Fannie Mae determine the Mortgage Loan has heightened credit risk. for your Portfolio Mortgage LoansPortfolio Mortgage LoansMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. that
    • reflects your loan rating methodology, and
    • identifies 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. with heightened credit risk.
  • Submit your ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. WatchlistWatchlistThe risk rating classification if you or Fannie Mae determine the Mortgage Loan has heightened credit risk. for all
    • Primary Risk Mortgage LoansPrimary Risk Mortgage LoansMortgage Loan where Fannie Mae bears all losses or where the Lender and Fannie Mae share losses. , and
    • Secondary Risk Mortgage LoansSecondary Risk Mortgage LoansMortgage Loan where the Lender bears all losses until the Lender’s recourse obligations are exhausted. .

Operating Procedures

Submit your ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. WatchlistWatchlistThe risk rating classification if you or Fannie Mae determine the Mortgage Loan has heightened credit risk. :

  • using the CSV upload template located under “Guides and Templates” in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. ; and
  • within 45 days after each calendar quarter end, but no later than the due date shown in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. .

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. , you must:

  • Respond “Yes” or “No” to the following 2 questions:
    • Will the BorrowerBorrowerPerson who is the obligor per the Note. likely not be able to make timely debt service payments?
    • Will the BorrowerBorrowerPerson who is the obligor per the Note. likely not meet the contractual obligations to timely pay off 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 ?
  • Explain
    • why it is being reported, and
    • the rationale for its rating.
  • Describe the current status of the issues.
601.02

Actions

Requirements

If a 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. has heightened credit risk, you must:

  • act to mitigate the risk of loss or default;
  • explain the nature and severity of the issues; and
  • contact Fannie Mae:
Contact For...
Watchlist Management Primary Risk Mortgage LoansPrimary Risk Mortgage LoansMortgage Loan where Fannie Mae bears all losses or where the Lender and Fannie Mae share losses. with deteriorating PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). performance near or below breakeven.
Top Loss Secondary Risk Mortgage LoansSecondary Risk Mortgage LoansMortgage Loan where the Lender bears all losses until the Lender’s recourse obligations are exhausted. with deteriorating PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). performance near or below breakeven.
Special Credits

PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). condition concerns per

 
Special Asset Management Monetary default.
Maturity Management 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. maturing within the next 24 months.

Operating Procedures

Your mitigating actions must include 1 or more of the following:

  • monitoring 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 any other collateral)
    • management and operations, and
    • physical condition (e.g., more frequent inspections);
  • implementing or enforcing Loan DocumentLoan DocumentAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. provisions such as
    • rescinding Loan DocumentLoan DocumentAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. waivers, or
    • reinstating Replacement ReserveReplacement ReserveCustodial Account funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. funding; and
  • communicating with all appropriate parties (e.g., BorrowerBorrowerPerson who is the obligor per the Note. , Key PrincipalsKey PrincipalsAny Person who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and who may be required to provide a Guaranty. , SponsorSponsorPrincipal equity owner and/or primary decision maker of the Borrower (often the Key Principal or the Person Controlling the Key Principal). , and PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). manager).