708.02

Servicer Workout Action Template (“SWAT”)

708.02A

Delivery of SWAT

The Special ServicerSpecial ServicerServicer (which may be Fannie Mae, the Servicer, or a third-party special servicer contracted by Fannie Mae) responsible for implementing the loss mitigation actions for a Non-Performing Mortgage Loan. must submit to Fannie Mae Special Asset ManagementSpecial Asset ManagementTeam performing Fannie Mae’s Special Servicing that can be contacted at [email protected]. a SWAT for review and approval not later than:

  • 60 days after the Date of DefaultDate of DefaultDate of the initial Payment Default or Performance Default, per Part V, Chapter 7: Non-Performing Mortgage Loans, Section 703: Mortgage Loan Defaults. for any Payment DefaultPayment DefaultFailure of a Borrower to pay when due and in full any payment required for the Mortgage Loan, including, but not limited to, principal, interest, late charges, default interest, fees, prepayment premium, escrows, or other collateral accounts for taxes, insurance premiums, and assessments, other…; or
  • 15 days after the Maturity DateMaturity DateDate all amounts due and owing per the Mortgage Loan become fully due and payable per the Loan Documents. if the BorrowerBorrowerPerson who is the obligor per the Note. fails to pay off 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. on or before the Maturity DateMaturity DateDate all amounts due and owing per the Mortgage Loan become fully due and payable per the Loan Documents. .

It is expected that the Special ServicerSpecial ServicerServicer (which may be Fannie Mae, the Servicer, or a third-party special servicer contracted by Fannie Mae) responsible for implementing the loss mitigation actions for a Non-Performing Mortgage Loan. has collected the necessary data and documentation to prepare its loss mitigation plan for the Non-Performing Mortgage LoanNon-Performing Mortgage LoanMortgage Loan that is subject to an uncured default. and selected a Course of ActionCourse of ActionFor Non-Performing Mortgage Loans, loss mitigation activities per per Part V, Chapter 7: Non-Performing Mortgage Loans. prior to submission of its SWAT.

708.02B

Purpose of SWAT

The purpose for the SWAT is to ascertain Potential Losses associated with the Non-Performing Mortgage LoanNon-Performing Mortgage LoanMortgage Loan that is subject to an uncured default. and the impact to the Lender'sLender'sPerson Fannie Mae approved to sell or service Mortgage Loans. recourse obligation.  The SWAT communicates to Fannie Mae the Lender'sLender'sPerson Fannie Mae approved to sell or service Mortgage Loans. selected Course of ActionCourse of ActionFor Non-Performing Mortgage Loans, loss mitigation activities per per Part V, Chapter 7: Non-Performing Mortgage Loans. , the underlying collateral value (which may be the Special ServicerSpecial ServicerServicer (which may be Fannie Mae, the Servicer, or a third-party special servicer contracted by Fannie Mae) responsible for implementing the loss mitigation actions for a Non-Performing Mortgage Loan. 's estimate or a broker's opinion of value, prior to obtaining an appraisal), operations and physical condition of 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). , financial condition of the BorrowerBorrowerPerson who is the obligor per the Note. , and loss mitigation actions proposed to be taken by the Special ServicerSpecial ServicerServicer (which may be Fannie Mae, the Servicer, or a third-party special servicer contracted by Fannie Mae) responsible for implementing the loss mitigation actions for a Non-Performing Mortgage Loan. .  Additionally, the SWAT specifies an anticipated resolution date, the anticipated resolution costs, and, if foreclosure is the selected Course of ActionCourse of ActionFor Non-Performing Mortgage Loans, loss mitigation activities per per Part V, Chapter 7: Non-Performing Mortgage Loans. , the timing for the Lender'sLender'sPerson Fannie Mae approved to sell or service Mortgage Loans. purchase 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. from Fannie Mae, as provided in this Chapter.

708.02C

Contents of SWAT

The SWAT submission must include:

  • a copy 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.  ;
  • a copy of the recorded Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the obligations under the Loan Documents. ; and
  • a copy of the recorded Assignment of Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the obligations under the Loan Documents. to Fannie Mae.  If the Assignment has not been recorded, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must, within five (5) 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. after delivery of the SWAT to Fannie Mae Special Asset ManagementSpecial Asset ManagementTeam performing Fannie Mae’s Special Servicing that can be contacted at [email protected]. either:
    • repurchase 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. from Fannie Mae in accordance with this Chapter; or
    • record the original Assignment and deliver to Fannie Mae a file-stamped copy of the recorded Assignment.

In addition, if foreclosure is the selected Course of ActionCourse of ActionFor Non-Performing Mortgage Loans, loss mitigation activities per per Part V, Chapter 7: Non-Performing Mortgage Loans. , the SWAT must include justification for a bid at the foreclosure sale that is less than an amount calculated as follows:

  • 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. ;
  • accrued interest, plus default interest, to the date of foreclosure sale;
  • sums advanced pursuant to the Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the obligations under the Loan Documents. (e.g., taxes, legal costs and fees, etc.);
  • the Yield Maintenance or 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. ; and
  • accrued late charges;

Less the following amounts:

  • funds held by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. for taxes and insurance deposits, and Collateral AgreementCollateral AgreementAgreement under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. deposits;
  • funds collected or received as rents or net operating income; and
  • proceeds from any insurance loss settlement.
708.02D

Fannie Mae Approves SWAT

If Fannie Mae approves the SWAT, the Special ServicerSpecial ServicerServicer (which may be Fannie Mae, the Servicer, or a third-party special servicer contracted by Fannie Mae) responsible for implementing the loss mitigation actions for a Non-Performing Mortgage Loan. will be granted a limited power of attorney to take all actions on behalf of Fannie Mae, as the noteholder and record lien holder, in accordance with the approved SWAT.  In addition, if the Special ServicerSpecial ServicerServicer (which may be Fannie Mae, the Servicer, or a third-party special servicer contracted by Fannie Mae) responsible for implementing the loss mitigation actions for a Non-Performing Mortgage Loan. or its legal counsel determines that, with respect to a specific Non-Performing Mortgage LoanNon-Performing Mortgage LoanMortgage Loan that is subject to an uncured default. , a waiver of actions otherwise required in this Chapter is required by local law or a waiver will result in a more effective default resolution, then the Special ServicerSpecial ServicerServicer (which may be Fannie Mae, the Servicer, or a third-party special servicer contracted by Fannie Mae) responsible for implementing the loss mitigation actions for a Non-Performing Mortgage Loan. must document the appropriate action through the SWAT.

708.02E

Fannie Mae does not Approve SWAT

If Fannie Mae and the Special ServicerSpecial ServicerServicer (which may be Fannie Mae, the Servicer, or a third-party special servicer contracted by Fannie Mae) responsible for implementing the loss mitigation actions for a Non-Performing Mortgage Loan. are not in agreement with the recommended Course of ActionCourse of ActionFor Non-Performing Mortgage Loans, loss mitigation activities per per Part V, Chapter 7: Non-Performing Mortgage Loans. and the SWAT is not approved by Fannie Mae:

  • the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. may purchase the Non-Performing Mortgage LoanNon-Performing Mortgage LoanMortgage Loan that is subject to an uncured default. from Fannie Mae without expectation or ability to utilize the Lender'sLender'sPerson Fannie Mae approved to sell or service Mortgage Loans. recourse obligation, as provided in this Chapter; or
  • Fannie Mae may select or implement a Course of ActionCourse of ActionFor Non-Performing Mortgage Loans, loss mitigation activities per per Part V, Chapter 7: Non-Performing Mortgage Loans. of its choosing.  In such an event, the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. must reimburse Fannie Mae, within one (1) month following written demand with supporting documentation of the amounts expended, for all costs incurred by Fannie Mae in connection with its implementation of the Course of ActionCourse of ActionFor Non-Performing Mortgage Loans, loss mitigation activities per per Part V, Chapter 7: Non-Performing Mortgage Loans. .  Fannie Mae may require settlement of any claims at any time before completion of the Course of ActionCourse of ActionFor Non-Performing Mortgage Loans, loss mitigation activities per per Part V, Chapter 7: Non-Performing Mortgage Loans. , based on a valuation process and reasonable estimates of its future costs.  All sums paid by LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. pursuant to this provision shall not be deemed Actual LossesActual LossesNet dollar amount of the loss on a Mortgage Loan as calculated on the Multifamily Loss Notification Form and approved by Fannie Mae. and shall not be reimbursed to LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. or credited against the Lender'sLender'sPerson Fannie Mae approved to sell or service Mortgage Loans. recourse obligation.
708.02F

Updating SWAT

It is essential for the Special ServicerSpecial ServicerServicer (which may be Fannie Mae, the Servicer, or a third-party special servicer contracted by Fannie Mae) responsible for implementing the loss mitigation actions for a Non-Performing Mortgage Loan. and Fannie Mae to have open and timely communication throughout the SWAT process.  Therefore, all SWATs must be updated and resubmitted to Fannie Mae Special Asset ManagementSpecial Asset ManagementTeam performing Fannie Mae’s Special Servicing that can be contacted at [email protected]. until final disposition of the Non-Performing Mortgage LoanNon-Performing Mortgage LoanMortgage Loan that is subject to an uncured default. at the following intervals:

  • within three (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. after the Special ServicerSpecial ServicerServicer (which may be Fannie Mae, the Servicer, or a third-party special servicer contracted by Fannie Mae) responsible for implementing the loss mitigation actions for a Non-Performing Mortgage Loan. 's receipt of new information impacting the approved SWAT that changes its elected Course of ActionCourse of ActionFor Non-Performing Mortgage Loans, loss mitigation activities per per Part V, Chapter 7: Non-Performing Mortgage Loans. , including granting any forbearance, changing any listing prices or sales strategies for 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). ;
  • at least ten (10) 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. prior to a Non-Performing Mortgage LoanNon-Performing Mortgage LoanMortgage Loan that is subject to an uncured default. repurchase by LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. in accordance with this Chapter;
  • at least five (5) 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. prior to foreclosure sale, with a foreclosure strategy and bid justification to be determined as provided above in this Chapter;
  • at least five (5) 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. prior to the execution of any purchase and sale agreement for 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). ; and
  • at least every six (6) months after the initial SWAT submission even if no changes have been made.
708.02G

Failure to Timely Deliver SWAT

If Fannie Mae notifies the Special ServicerSpecial ServicerServicer (which may be Fannie Mae, the Servicer, or a third-party special servicer contracted by Fannie Mae) responsible for implementing the loss mitigation actions for a Non-Performing Mortgage Loan. that it has failed to submit a SWAT in accordance with this Section, the Special ServicerSpecial ServicerServicer (which may be Fannie Mae, the Servicer, or a third-party special servicer contracted by Fannie Mae) responsible for implementing the loss mitigation actions for a Non-Performing Mortgage Loan. must prepare and submit the SWAT within fifteen (15) 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. following Fannie Mae's notification.  Any continued failure to submit a required SWAT may result in Fannie Mae selecting or implementing a Course of ActionCourse of ActionFor Non-Performing Mortgage Loans, loss mitigation activities per per Part V, Chapter 7: Non-Performing Mortgage Loans. of its choosing. In such an event, within one (1) month following written demand with supporting documentation of the amounts expended, the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. must reimburse Fannie Mae for all costs incurred by Fannie Mae in connection with its implementation of the Course of ActionCourse of ActionFor Non-Performing Mortgage Loans, loss mitigation activities per per Part V, Chapter 7: Non-Performing Mortgage Loans. .  Fannie Mae may require settlement of any claims at any time before completion of the Course of ActionCourse of ActionFor Non-Performing Mortgage Loans, loss mitigation activities per per Part V, Chapter 7: Non-Performing Mortgage Loans. , based on a valuation process and reasonable estimates of its future costs.  All sums paid by LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. pursuant to this provision shall not be deemed Actual LossesActual LossesNet dollar amount of the loss on a Mortgage Loan as calculated on the Multifamily Loss Notification Form and approved by Fannie Mae. and shall not be reimbursed to LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. or credited against the Lender'sLender'sPerson Fannie Mae approved to sell or service Mortgage Loans. recourse obligation.

708.02H

No Credit Against Recourse

No credit against a Lender'sLender'sPerson Fannie Mae approved to sell or service Mortgage Loans. recourse obligation will be given without an approved SWAT.