Streamlined Treasury Lock Breakage
Operating Procedures
Fannie Mae may take certain actions (as specified in the Streamlined Treasury Lock Agreement (Form 6430.STLA)) if, by the Quote LetterQuote LetterFannie Mae response via DUS Gateway to your request for an interest rate quote on a Mortgage Loan, specifying: the breakdown of Total Credit Fees into the applicable Guaranty Fee, and Servicing Fee; and any other required terms and conditions. expiration date:
- you fail to:
- enter into a Streamlined Rate LockStreamlined Rate LockOptional process permitting a Rate Lock before completing full Mortgage Loan underwriting, per Part IV, Chapter 3: Streamlined Rate Lock. or standard 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. with Fannie Mae for 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. ; and
- obtain 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. 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. ; or
- any other default by the SponsorSponsorPrincipal equity owner and/or primary decision maker of the Borrower (often the Key Principal or the Person Controlling the Key Principal). or any BorrowerBorrowerPerson who is the obligor per the Note. party occurs under the Streamlined Treasury Lock Agreement (Form 6430.STLA).
If you fail to enter into a Streamlined Rate LockStreamlined Rate LockOptional process permitting a Rate Lock before completing full Mortgage Loan underwriting, per Part IV, Chapter 3: Streamlined Rate Lock. or standard 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 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. , Fannie Mae will:
- draft, as a breakage fee paid to the Multifamily Trading DeskMultifamily Trading DeskTeam that:
purchases and trades Cash Mortgage Loans and MBS Mortgage Loans for Fannie Mae's own account; and
can be contacted at (888) 889-1118.
for the broken Streamlined Treasury LockStreamlined Treasury LockOptional process permitting you to lock the Index and hold the Investor Spread and Total Credit Fees before entering into either a:
Streamlined Rate Lock; or
standard Rate Lock per Part IV, Chapter 2: Rate Lock and Committing, Section 202: Obtaining a Rate Lock.
, an amount equal to:
- the greater of (but not to exceed the Streamlined Treasury Lock Deposit):
- 0.5% of the Streamlined Treasury LockStreamlined Treasury LockOptional process permitting you to lock the Index and hold the Investor Spread and Total Credit Fees before entering into either a: Streamlined Rate Lock; or standard Rate Lock per Part IV, Chapter 2: Rate Lock and Committing, Section 202: Obtaining a Rate Lock. amount; or
- all costs, expenses, and/or losses incurred by Fannie Mae in connection with entering into, maintaining, or unwinding hedge positions executed in reliance on the Streamlined Treasury LockStreamlined Treasury LockOptional process permitting you to lock the Index and hold the Investor Spread and Total Credit Fees before entering into either a: Streamlined Rate Lock; or standard Rate Lock per Part IV, Chapter 2: Rate Lock and Committing, Section 202: Obtaining a Rate Lock. ; plus
- all enforcement costs incurred by Fannie Mae in connection with the Streamlined Treasury LockStreamlined Treasury LockOptional process permitting you to lock the Index and hold the Investor Spread and Total Credit Fees before entering into either a: Streamlined Rate Lock; or standard Rate Lock per Part IV, Chapter 2: Rate Lock and Committing, Section 202: Obtaining a Rate Lock. ; and
- the greater of (but not to exceed the Streamlined Treasury Lock Deposit):
- retain these funds as liquidated damages in full satisfaction of your Streamlined Treasury LockStreamlined Treasury LockOptional process permitting you to lock the Index and hold the Investor Spread and Total Credit Fees before entering into either a: Streamlined Rate Lock; or standard Rate Lock per Part IV, Chapter 2: Rate Lock and Committing, Section 202: Obtaining a Rate Lock. obligations.
This remedy will occur:
- after the Index Lock Expiration Date specified in the Streamlined Treasury Lock Agreement (Form 6430.STLA); 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 under the Streamlined Treasury LockStreamlined Treasury LockOptional process permitting you to lock the Index and hold the Investor Spread and Total Credit Fees before entering into either a: Streamlined Rate Lock; or standard Rate Lock per Part IV, Chapter 2: Rate Lock and Committing, Section 202: Obtaining a Rate Lock. .