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).