Required Annual Adjustment to Correct Principal Balance vs. Security Balance Difference

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 responsible for servicing the Mortgage Loan (e.g.,  the originator, the selling Lender, or a third-party servicer). 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 responsible for servicing the Mortgage Loan (e.g.,  the originator, the selling Lender, or a third-party servicer). 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 ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g.,  the originator, the selling Lender, or a third-party servicer).’s 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 responsible for servicing the Mortgage Loan (e.g.,  the originator, the selling Lender, or a third-party servicer). may adjust a subsequent pass-through amount that includes an “unscheduled” principal collection to correct for this difference.