703.02
| 703.02A | |
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The Loan DocumentsLoan DocumentsAll documents evidencing, securing, or guaranteeing the debt obligation executed for a Mortgage Loan and approved by Fannie Mae. will provide acts of the BorrowerBorrowerPerson who is the obligor under the Note. that are required to be performed, the failure of which may be designated as an event of default. There may be grace periods for curing such a default. The ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). must provide written notice of the default to Fannie Mae and to the BorrowerBorrowerPerson who is the obligor under the Note. as required in the Loan DocumentsLoan DocumentsAll documents evidencing, securing, or guaranteeing the debt obligation executed for a Mortgage Loan and approved by Fannie Mae.. The ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). must diligently pursue the BorrowerBorrowerPerson who is the obligor under the Note.’s cure thereof within the time permitted. If the BorrowerBorrowerPerson who is the obligor under the Note. fails to cure the default within the time provided in the Loan DocumentsLoan DocumentsAll documents evidencing, securing, or guaranteeing the debt obligation executed for a Mortgage Loan and approved by Fannie Mae. to effect such a cure, a Performance DefaultPerformance DefaultFailure of a Borrower to perform any promise or covenant within any applicable grace periods under the related Mortgage Loan other than a failure that constitutes a Payment Default. has occurred. Depending on the severity of the Performance DefaultPerformance DefaultFailure of a Borrower to perform any promise or covenant within any applicable grace periods under the related Mortgage Loan other than a failure that constitutes a Payment Default., Fannie Mae may permit the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). to monitor the default per Part V, Chapter 7: Non-Performing Mortgage Loans, Section 703.02C: Lender Tenders for Minor or Immaterial Defaults.
| 703.02B | |
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Often, the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans., ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer)., or Fannie Mae become aware of a Performance DefaultPerformance DefaultFailure of a Borrower to perform any promise or covenant within any applicable grace periods under the related Mortgage Loan other than a failure that constitutes a Payment Default. through receipt of a complaint, petition, or similar legal document in connection with a lawsuit. While the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). has the duty to provide notices of default to the BorrowerBorrowerPerson who is the obligor under the Note., neither the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. nor the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). is authorized to accept service of process on behalf of Fannie Mae. Fannie Mae's Legal Department in Washington, DC must accept service of process for Fannie Mae related to 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. or PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code)..
1. Primary Risk Mortgage Loans
In some instances, for minor or relatively immaterial defaults (like materialmen and mechanics' liens) on Primary Risk Mortgage LoansPrimary Risk Mortgage LoansMortgage Loan where Fannie Mae bears all losses or where the Lender and Fannie Mae share losses., Fannie Mae will elect to tender the Performance DefaultPerformance DefaultFailure of a Borrower to perform any promise or covenant within any applicable grace periods under the related Mortgage Loan other than a failure that constitutes a Payment Default. to the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). to monitor, engage legal counsel as necessary, and otherwise protect Fannie Mae's security interest in the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code).. These "Lender Tenders" will be monitored and special serviced by the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). using its customary standard of care for similar Performance DefaultsPerformance DefaultsFailure of a Borrower to perform any promise or covenant within any applicable grace periods under the related Mortgage Loan other than a failure that constitutes a Payment Default. in its own portfolio.
2. Secondary Risk Mortgage Loans
For Secondary Risk Mortgage LoansSecondary Risk Mortgage LoansMortgage Loan where the Lender bears all losses until the Lender’s recourse obligations are exhausted., all of the monitoring and special servicing activities for minor or relatively immaterial defaults will be performed by the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer)..
3. Lender Tenders Not Subject to Requirements of this Chapter
Lender Tenders are not subject to the terms of this Chapter.