Section 205
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 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 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 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.
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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 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 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 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 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 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 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 Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .