Chapter 2
| Section 201 | |
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This Chapter:
- outlines the reporting and account reconciliation policies and procedures for 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. ;
- applies to both Cash Mortgage LoansCash Mortgage LoansMortgage Loan purchased by Fannie Mae in exchange for cash. and Securitized Mortgage LoansSecuritized Mortgage LoansMortgage Loan backing an MBS, PFP MBS, or REMIC. , except where noted that a particular procedure is applicable only to one or the other execution;
- describes the methods for accounting for scheduled monthly payments, payment shortages, additional principal payments, repayments of advances, and payments in full; and
- describes Fannie Mae's remittance requirements, the method for remitting, and the format for reporting 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. information on all transactions.
Fannie Mae purchases 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. for cash or in exchange for the issuance of a SecuritySecurityMBS, PFP MBS, or REMIC. . Fannie Mae reserves the right to later place any of the 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. purchased for cash into a SecuritySecurityMBS, PFP MBS, or REMIC. (e.g., PFP MBSPFP MBSMBS backed by a PFP Mortgage Loan. ). If Fannie Mae securitizes 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. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may be required to make certain changes to its reporting and remitting procedures. If such an event occurs and changes to a Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. reporting and remitting procedures will be required, Fannie Mae will notify the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in writing.
Fannie Mae reserves the right to modify its Remittance Accounting system and forms to accommodate future changes to its overall systems applicable to 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. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is responsible for collecting monthly P&IP&IPrincipal and interest payments from the BorrowerBorrowerPerson who is the obligor per the Note. in accordance with the terms of the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. executed by the BorrowerBorrowerPerson who is the obligor per the Note. . All P&IP&IPrincipal and interest payments and T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. amounts collected by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in connection with 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. must be deposited in the applicable P&IP&IPrincipal and interest and T&I Custodial AccountsT&I Custodial AccountsCustodial Account for the deposit of T&I and other impound escrow funds. maintained in accordance with the requirements of Part V, Chapter 3: Custodial Accounts.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must track and account separately for all P&IP&IPrincipal and interest payment activity relating to 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. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must report to Fannie Mae on the P&IP&IPrincipal and interest payment activity relating to 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 provided in this Chapter.
| Section 203 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must use Fannie Mae’s eServicing System to report 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. level information on all Cash Mortgage LoansCash Mortgage LoansMortgage Loan purchased by Fannie Mae in exchange for cash. and Securitized Mortgage LoansSecuritized Mortgage LoansMortgage Loan backing an MBS, PFP MBS, or REMIC. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must register to use the eServicing System prior to use. Information regarding registering for the eServicing System can be found on https://multifamily.fanniemae.com/applications-technology/eservicing. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must segregate its Cash Mortgage LoanCash Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for cash. servicing portfolio from its Securitized Mortgage LoanSecuritized Mortgage LoanMortgage Loan backing an MBS, PFP MBS, or REMIC. servicing portfolio for reporting purposes.
All reportable transactions will fall into one or more categories. Some transactions update the status of 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. or summarize collection activity, while others update the information in Fannie Mae’s records (e.g., PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). addresses, ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. 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. identification numbers, 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. terms, subservicing status, etc.).
| 203.03 | |
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| 203.03A | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must use the eServicing System to report its monthly 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. activity to Fannie Mae following the end of each Reporting Period, commencing with the month following the:
- date Fannie Mae acquired the Cash Mortgage LoanCash Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for cash. or PFP Mortgage LoanPFP Mortgage LoanMortgage Loan originally purchased as a Cash Mortgage Loan or held in Fannie Mae’s portfolio, but subsequently securitized as an MBS. ; or
- Issue DateIssue DateFirst day of the month a Security is issued. for Securitized Mortgage LoansSecuritized Mortgage LoansMortgage Loan backing an MBS, PFP MBS, or REMIC. (other than PFP MBSPFP MBSMBS backed by a PFP Mortgage Loan. ).
The following are the cutoff dates for activity reporting on 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. :
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Monthly Activity Cutoff Date |
Monthly Activity Report Due Date |
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Servicer may establish as its cutoff date any day from the 25th of the month to the last day of the month. |
Not later than the second 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 the month following the cutoff date for the Reporting Period. |
| 203.04A | |
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For each Security Pool serviced by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a monthly Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. report that references:
- the Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. ; and
- the Security Pool number.
For Same Month PoolingSame Month PoolingDelivery option permitting Mortgage Loans to be pooled and secure an MBS issued in the same month as the Mortgage Loan Origination Date. 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. , the BorrowerBorrowerPerson who is the obligor per the Note. will have made no payment as the monthly debt service payment will not yet have come due. Because the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. report for the month following the Issue DateIssue DateFirst day of the month a Security is issued. of the Security Pool under the Same Month PoolingSame Month PoolingDelivery option permitting Mortgage Loans to be pooled and secure an MBS issued in the same month as the Mortgage Loan Origination Date. 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. option will not include an amount for principal curtailment for amortizing 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. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must report the Issue Date Principal BalanceIssue Date Principal BalanceFor any Securitized Mortgage Loan, the UPB of the Note after crediting: the principal portion of any scheduled monthly installment due on or before the Security Issue Date, whether or not collected; and any unscheduled principal payment received on or before the Security Issue Date. of 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. as the first reporting cycle Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. . As long as the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. reports the Issue Date Principal BalanceIssue Date Principal BalanceFor any Securitized Mortgage Loan, the UPB of the Note after crediting: the principal portion of any scheduled monthly installment due on or before the Security Issue Date, whether or not collected; and any unscheduled principal payment received on or before the Security Issue Date. of the Securitized Mortgage LoanSecuritized Mortgage LoanMortgage Loan backing an MBS, PFP MBS, or REMIC. in its first Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. report, there will be no impact on the Pool-to-Security balance reconciliation for that month.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must have transmitted all of its Security BalancesSecurity BalancesFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. (or corrections to balances reported in error) to Fannie Mae by 5:00 p.m. Eastern Time on the second 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 following the Reporting Period. If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. anticipates a problem in meeting this reporting deadline or has a transmission problem that will result in late reporting, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must contact its Fannie Mae RepresentativeFannie Mae RepresentativeFannie Mae personnel who assist you with various business matters (e.g., Fannie Mae Deal Team, pricing, delivery, servicing, asset management, etc.). .
If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. fails to meet Fannie Mae’s reporting deadline, Fannie Mae may estimate the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. Security BalancesSecurity BalancesFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. so Fannie Mae can pass-through payments to InvestorsInvestorsMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. and publish Security BalancesSecurity BalancesFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. in a timely manner. When Fannie Mae does this, Fannie Mae’s estimate will be both the published Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. , and the beginning Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. used for the next month’s Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. report. Fannie Mae will send the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. written notification of any published estimated Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. within 10 days after publication by Fannie Mae.
| 203.05 | |
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The exact due date of the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. submission of its reports depends on the type of transaction being reported.
| 203.05A | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must report removal activity (e.g., payoff, repurchase, liquidated-held for sale, and liquidated third-party sale/condemnation) by the second 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 the month following the cutoff date for the Reporting Period in which the activity occurred. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may correct any removal activity reporting error by resubmitting the corrected information in time to reach Fannie Mae by the second 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 the month following the Reporting Period. If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is unable to correct the error, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must notify its Fannie Mae RepresentativeFannie Mae RepresentativeFannie Mae personnel who assist you with various business matters (e.g., Fannie Mae Deal Team, pricing, delivery, servicing, asset management, etc.). about the error.
| 203.05B | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must make sure that all other transactions (which are the transactions that comprise the bulk of its reports) are transmitted in sufficient time for receipt by Fannie Mae by the second 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 the month following the cutoff date for the Reporting Period.
The Loan Activity Record is used to provide 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. -level detail of amounts due to Fannie Mae or the InvestorInvestorMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. 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. on the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. trial balance.
| 203.06A | |
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Payment collection relates to the receipt and application of the monthly payment. The information that must be reported includes:
- actual last paid installment ("LPILPIDue date of the last payment received. ") date;
- actual UPBUPBUnpaid Principal Balance ; and
- remittance amount (distributed between P&IP&IPrincipal and interest ).
Under the Same Month PoolingSame Month PoolingDelivery option permitting Mortgage Loans to be pooled and secure an MBS issued in the same month as the Mortgage Loan Origination Date. option, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not report a principal distribution amount for the first reporting cycle following the Issue DateIssue DateFirst day of the month a Security is issued. of the Security Pool because no payment will have come due from the BorrowerBorrowerPerson who is the obligor per the Note. . For the first reporting cycle, the actual UPBUPBUnpaid Principal Balance of 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 equal the Issue DateIssue DateFirst day of the month a Security is issued. principal balance, as no principal payment will be subtracted from the Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. or passed through to the InvestorInvestorMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. .
| 203.06B | |
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Fee collection relates to any special fees that were collected from the BorrowerBorrowerPerson who is the obligor per the Note. during the Reporting Period.
| 203.06C | |
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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. status relates to special actions that have occurred (e.g., a payoff or a repurchase). An action code and an action date (specifying when the reported action occurred or will occur) must be reported. The User Manual for the eServicing System provides detailed information regarding action codes and action dates.
On approximately the 10th day of the month, reports are available in the eServicing System for ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to verify the amount to be drafted on the Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. , including P&IP&IPrincipal and interest and Prepayment PremiumsPrepayment PremiumsFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. due to Fannie Mae or the MBS InvestorMBS InvestorFor MBS Mortgage Loans, either a Third Party MBS Investor for Lender-Arranged Sales, or the Multifamily Trading Desk. .
3 Business DaysBusiness DaysAny 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. before the Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. , reports are available in the Cash Loan Drafting ApplicationCash Loan Drafting ApplicationMultifamily application or successor system, where you review, update, and certify amounts for Fannie Mae to draft from your bank accounts via ACH for monthly P&I and payoff remittances for: Cash Mortgage Loans; and PFP Mortgage Loans. for ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to review, update, and certify the amount to be drafted on the Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. , including Prepayment PremiumsPrepayment PremiumsFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. due to Fannie Mae. Amounts must be reviewed, updated, and certified by 4:30 p.m. ET 1 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. before the Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. .
| 203.07C | |
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By the 23rd day of the month, the Summary of Processed Activity and other reports are available in the eServicing System for the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to reconcile with its internal records.
| 203.08A | |
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At the end of each Reporting Period, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must reconcile the actual ending 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. balance 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. in any given Security Pool to the ending Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. for that Security Pool. To perform this reconciliation, the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. must use the following calculation:
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Function |
Ending Principal Balance for the Mortgage Loan in Security Pool (from current month) |
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PLUS |
Prepaid Principal (as of current month) |
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MINUS |
Delinquent Principal (as of current month) |
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MINUS |
Scheduled Principal (as of current month) |
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PLUS |
Principal Portion of Last Installment for Liquidated Mortgage Loan (as of current month) |
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Adjusted Principal Balance for Security Pool |
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MINUS |
Ending Security Balance for Reporting Period |
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EQUALS |
Difference |
| 203.08B | |
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Because the total amount of 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. that is issued for a Security Pool is rounded down to the next lowest whole dollar amount of the actual “Issue Date Principal BalanceIssue Date Principal BalanceFor any Securitized Mortgage Loan, the UPB of the Note after crediting: the principal portion of any scheduled monthly installment due on or before the Security Issue Date, whether or not collected; and any unscheduled principal payment received on or before the Security Issue Date. of 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 Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. will be smaller than the actual UPBUPBUnpaid Principal Balance of 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 difference will never be greater than $0.99 for a single Security Pool. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must adjust for this difference in the first monthly accounting report it submits after the Issue DateIssue DateFirst day of the month a Security is issued. of the SecuritySecurityMBS, PFP MBS, or REMIC. , classifying it as an “unscheduled” principal adjustment.
Other differences may arise in the reconciliation between the UPBUPBUnpaid Principal Balance of 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. in a Security Pool and the outstanding Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. . These differences cannot exceed more than $0.25 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. in the Security Pool. At least once a year, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must make an adjustment to correct any differences.
1. If Security Balance is Greater than UPB
If the Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. is higher than the UPBUPBUnpaid Principal Balance of 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 ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately deposit the funds in the “scheduled/scheduled” P&I Custodial AccountP&I Custodial AccountCustodial Account for principal and interest deposits. for Security Pools so that the funds can be passed through to Fannie Mae (as an “unscheduled” principal collection) with the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. next monthly remittance.
2. If Security Balance is Lower than UPB
If the Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. is lower than the UPBUPBUnpaid Principal Balance of 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 ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may adjust a subsequent pass-through amount that includes an “unscheduled” principal collection to correct for this difference.
The eServicing System produces a Pool-to-Security Reconciliation on a monthly basis to assist ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. with review. ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. are required to review and certify any pool-to-security difference each month by month end. Differences occur when the MBSMBSMortgage-Backed Security pool security balance does not match the sum of the scheduled UPBUPBUnpaid Principal Balance of 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 calculates pool-to-security differences after monthly 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 SecuritySecurityMBS, PFP MBS, or REMIC. reporting is complete. For each pool with a difference, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must review the deficiency, research the difference, and determine the appropriate remedy. The Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. certification includes the identification and selection of a deficiency reason, and a statement of how it should be resolved.
| Section 204 | |
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| 204.01 | |
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Generally the Borrower'sBorrower'sPerson who is the obligor per the Note. monthly payment consists of P&IP&IPrincipal and interest and deposits for insurance, taxes, replacement reserves and replacement hedges or some combination of such items. In some instances, the payment may include additional funds to be applied toward the UPBUPBUnpaid Principal Balance or to repay funds advanced by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must account for each portion of the Borrower'sBorrower'sPerson who is the obligor per the Note. monthly payment in the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. records. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must track both actual and scheduled 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. balances (a.k.a., Security Pool and SecuritySecurityMBS, PFP MBS, or REMIC. balances) and reconcile any outstanding difference (e.g., the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. advances for insufficient BorrowerBorrowerPerson who is the obligor per the Note. payments).
| 204.02 | |
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The interest calculation method is generally specified in the Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. are required to calculate interest due 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. as required by the Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . If the Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. do not contain any information regarding the interest calculation method, then ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. should assume a 30/360 accrual method.
Interest will accrue based upon the actual number of days in a calendar month and a 360-day year.
Interest will accrue based upon a 30-day month and a 360-day year.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must enforce 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. in accordance with the terms of the executed Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . This includes making periodic interest rate and payment adjustments in connection with any type of Adjustable Rate Mortgage LoansAdjustable Rate Mortgage LoansMortgage Loan with an interest rate that periodically adjusts based on an Index per the Note or Loan Documents. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must change 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. interest rate and monthly payments to the fullest extent permitted or required, maintaining at all times 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. margin specified in the executed Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . Factors used to determine the new interest rate for ARM Loans include:
- the IndexIndexBasis for determining the Gross Note Rate of an ARM Loan, including any required alternative index that may be determined necessary by Fannie Mae because the Index is no longer widely accepted or has been replaced as the index for similar financial instruments. on which the rate is to be based;
- the “look back” period;
- any applicable interest rate change limitations; and
- 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. margin.
If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. fails to make a timely interest rate or payment adjustment, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must use its own funds to satisfy any shortage.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must determine the IndexIndexBasis for determining the Gross Note Rate of an ARM Loan, including any required alternative index that may be determined necessary by Fannie Mae because the Index is no longer widely accepted or has been replaced as the index for similar financial instruments. on which the rate is to be based as specified in the Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . To assist the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in monitoring indexes, Fannie Mae offers an ARM LoanARM LoanMortgage Loan with an interest rate that periodically adjusts based on an Index per the Note or Loan Documents. IndexIndexBasis for determining the Gross Note Rate of an ARM Loan, including any required alternative index that may be determined necessary by Fannie Mae because the Index is no longer widely accepted or has been replaced as the index for similar financial instruments. service through its website on https://multifamily.fanniemae.com. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must establish procedures to monitor the IndexIndexBasis for determining the Gross Note Rate of an ARM Loan, including any required alternative index that may be determined necessary by Fannie Mae because the Index is no longer widely accepted or has been replaced as the index for similar financial instruments. to assure that the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. uses the latest available IndexIndexBasis for determining the Gross Note Rate of an ARM Loan, including any required alternative index that may be determined necessary by Fannie Mae because the Index is no longer widely accepted or has been replaced as the index for similar financial instruments. to determine an interest rate change.
Except for Fannie Mae Structured ARM Loans, a Required Monthly Payment change occurs at established intervals and corresponds to any change in the interest rate. The new monthly payment is calculated by determining the amount required to repay the UPBUPBUnpaid Principal Balance of 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. in substantially equal payments over the remaining amortization period of 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. at the interest rate in effect following the latest interest rate change utilizing the applicable Interest Calculation Method. 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. is an interest-only 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 new monthly payment is the monthly interest payment at the interest rate in effect following the latest interest rate change utilizing the applicable Interest Calculation Method. The new Required Monthly Payment becomes effective on the first day of the month following the month in which the interest Rate Change Date occurs.
Prior to the effective date of the Monthly Payment/Rate Change the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a Monthly Payment/Rate Change via the eServicing System. For assistance with rate and/or payment changes, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must contact its Fannie Mae RepresentativeFannie Mae RepresentativeFannie Mae personnel who assist you with various business matters (e.g., Fannie Mae Deal Team, pricing, delivery, servicing, asset management, etc.). .
In order for Fannie Mae to account for ARM LoansARM LoansMortgage Loan with an interest rate that periodically adjusts based on an Index per the Note or Loan Documents. on its books, Fannie Mae must receive the Monthly Payment/Rate Change on a timely basis.
| 205.03 | |
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Structured ARM Loans are subject to the same reporting and remittance requirements as other ARM LoansARM LoansMortgage Loan with an interest rate that periodically adjusts based on an Index per the Note or Loan Documents. except for the differences described in this section.
The interest rate for Structured ARM Loans will be determined based on the applicable interest period (typically either 1-month or 3-months) for the applicable IndexIndexBasis for determining the Gross Note Rate of an ARM Loan, including any required alternative index that may be determined necessary by Fannie Mae because the Index is no longer widely accepted or has been replaced as the index for similar financial instruments. using a 1-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. look-back period per the Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. and the requirements of the applicable Structured ARM Loan Plan NumberPlan NumberNumber identifying the applicable loan characteristics for any Mortgage Loan that accrues interest at a variable rate at any time during the loan term. . The applicable interest rate will be determined by adding 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. margin specified in the Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. to the applicable IndexIndexBasis for determining the Gross Note Rate of an ARM Loan, including any required alternative index that may be determined necessary by Fannie Mae because the Index is no longer widely accepted or has been replaced as the index for similar financial instruments. value. No periodic or lifetime interest rate limitations apply to this computation.
Rate changes for Structured ARM Loans with a:
- 1-month interest period (Plan NumbersPlan NumbersNumber identifying the applicable loan characteristics for any Mortgage Loan that accrues interest at a variable rate at any time during the loan term. 03488 and 04932) will occur on the first payment date and the first day of each month thereafter until maturity as specified in the Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; and
- 3-month interest period (Plan NumberPlan NumberNumber identifying the applicable loan characteristics for any Mortgage Loan that accrues interest at a variable rate at any time during the loan term. 03487) will occur on the first day of the month which is the second month following the first payment date and the first day of every third month thereafter until maturity as specified in the Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
The first payment date will be:
- the 1st day of the month following the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. , if the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. is the 1st calendar day of the month; or
- the 1st day of the second full calendar month following the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. for all other 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. .
For example, 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. closes on June 15th, the First Payment Date is on August 1st, and 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. closes on June 1st, the First Payment Date is on July 1st.
A Required Monthly Payment change occurs at established intervals and corresponds to any change in the interest rate, the number of days in an accrual period, or the UPBUPBUnpaid Principal Balance of 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. .
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. amortizes, the Required Monthly Payment is the sum of the monthly interest installment and the monthly principal installment. The monthly interest installment is calculated by multiplying the UPBUPBUnpaid Principal Balance of 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 interest rate in effect following the latest interest rate change utilizing an actual/360 interest accrual method. Equal monthly principal installments will be made over the term of 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. in the amount set forth in the Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
If the Structured ARM Loan is interest-only, the Required Monthly Payment is the monthly interest payment which is calculated by multiplying the UPBUPBUnpaid Principal Balance of 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 interest rate in effect following the latest interest rate change utilizing an actual/360 interest accrual method as set forth in the Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . The new Required Monthly Payment becomes effective for Structured ARM Loans with a:
- 1-month interest period (Plan NumbersPlan NumbersNumber identifying the applicable loan characteristics for any Mortgage Loan that accrues interest at a variable rate at any time during the loan term. 03488 and 04932), on the 1st day of the month following the month in which the Rate Change Date occurs; or
- 3-month interest period (Plan NumberPlan NumberNumber identifying the applicable loan characteristics for any Mortgage Loan that accrues interest at a variable rate at any time during the loan term. 03487), on the 1st day of each month following any change in the interest rate or if the number of days in an accrual period is different from the prior month, as set forth in the Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
| Section 206 | |
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For 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. originated using Fannie Mae published NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. forms, the Borrower'sBorrower'sPerson who is the obligor per the Note. monthly payments must be applied in the following order:
- any delinquent interest (other than interest attributable to the default interest rate);
- any delinquent principal;
- interest for the current month at the Gross Note RateGross Note RateInterest rate stated in the Loan Documents. ;
- principal for the current month;
- reimburse the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. or Fannie Mae for any T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. payments;
- reimburse the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. or Fannie Mae for any delinquency resolution costs, attorney fees, AppraisalAppraisalWritten statement independently and impartially prepared by a qualified appraiser stating an opinion of the market value of the Property as of a specific date, supported by the presentation and analysis of relevant market information. fees, environmental assessment costs, or PCAPCAAssessment of the current physical condition and historical operation of the Property. costs;
- reimburse the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. or Fannie Mae for any payments to protect 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). ;
- late charges;
- default interest;
- T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. deposits; and
- Collateral Agreement Custodial AccountCollateral Agreement Custodial AccountCustodial account established by the Servicer for depositing funds received from the Borrower for Collateral Agreements. deposits.
For 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. not originated using Fannie Mae published NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. forms, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must apply monthly payments received from the BorrowerBorrowerPerson who is the obligor per the Note. as required by the relevant Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . If the Loans Documents do not provide for the order of application of monthly payments, then the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must follow the requirements for the Fannie Mae Post-1998 Loan Documents as provided in Part V, Chapter 2: Reporting and Remitting, Section 206.01: Fannie Mae Form Loan Documents.
| Section 207 | |
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When payments received from the BorrowerBorrowerPerson who is the obligor per the Note. are less than the total amount then due under 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. (including P&IP&IPrincipal and interest and T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. , but may also include required deposits to the Replacement ReserveReplacement ReserveCustodial Account funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. or other monies due as required in the Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ), 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 in default and the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must follow the default procedures specified in Part V, Chapter 7: Non-Performing Mortgage Loans.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may not supplement partial payments received from the BorrowerBorrowerPerson who is the obligor per the Note. with funds from any Collateral Agreement Custodial AccountCollateral Agreement Custodial AccountCustodial account established by the Servicer for depositing funds received from the Borrower for Collateral Agreements. without Fannie Mae's prior written consent.
| Section 208 | |
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| 208.01 | |
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