Prepayment Premiums for ARM Loans and Structured ARM Loans
Unless the prepayment of an ARM LoanARM LoanMortgage Loan with an interest rate that periodically adjusts based on an Index per the Note or Loan Documents. that used Prepayment Option 1 or Prepayment Option 2, or of a Structured ARM Loan is the result of a casualty or condemnation, any prepayment made before a date specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. (typically the last calendar day of the fourth month prior to the month in which the Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. occurs) must include a Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. that will be shared between Fannie Mae and the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . The InvestorInvestorMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. is not entitled to receive any portion of the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. for either an ARM LoanARM LoanMortgage Loan with an interest rate that periodically adjusts based on an Index per the Note or Loan Documents. or a Structured ARM Loan. In each case, Fannie Mae’s share will be a percentage determined by the following formula:
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Guaranty Fee (Guaranty Fee + Servicing Fee) |
For example, if the Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. is 62.5 basis points and if the Servicing FeeServicing FeeFee a Servicer receives for collecting payments, managing operational procedures, and assuming your portion of credit risk for a Mortgage Loan, and which may be expressed as a percentage. is 45 basis points, then Fannie Mae's share will be:
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62.5 (62.5 + 45) |
or |
58.14%. |
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must remit the portion of the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. due Fannie Mae with the final 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. payment. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may retain the balance of the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. .
No Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. is due in connection with an ARM LoanARM LoanMortgage Loan with an interest rate that periodically adjusts based on an Index per the Note or Loan Documents. with a conversion option or with a Structured ARM Loan that is converting to a fixed rate 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. .