| JOINT WORKOUTS ARE NOT AVAILABLE FOR SECURITIZED MORTGAGE LOANS WHILE THE MORTGAGE LOAN REMAINS IN THE SECURITY TRUST. |
| 711.04A | |
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Either the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. or Fannie Mae may propose that the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. and Fannie Mae attempt to negotiate a Joint Workout with the BorrowerBorrowerPerson who is the obligor per the Note. with respect to a Non-Performing Mortgage LoanNon-Performing Mortgage LoanMortgage Loan that is subject to an uncured default. . A refinancing of the Non-Performing Mortgage LoanNon-Performing Mortgage LoanMortgage Loan that is subject to an uncured default. under Fannie Mae’s In Place LoanIn Place LoanMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. execution as described in Part V, Chapter 8: In Place Loans is a Joint Workout under this Chapter.
If Fannie Mae and the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. agree upon a Joint Workout, then during the negotiation of the workout agreement, the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). must continue to make Delinquency AdvancesDelinquency AdvancesFor Primary Risk Mortgage Loans and Secondary Risk Mortgage Loans, an amount advanced by a primary servicer in respect of regularly scheduled monthly interest or principal due on 1 or more Mortgage Loans, to the extent required under its Lender Contract. For Secondary Risk Mortgage Loans only, in… to Fannie Mae in accordance with the Lender’s ContractLender’s ContractProgram Documents per the Multifamily Selling and Servicing Agreement. . (See the Checklist of Issues to Consider in Doing a Workout Analysis (Form 4809) to review the specific tasks to be completed prior to electing a Joint Fannie Mae/ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). Workout.)
| 711.04C | |
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The following is a general description of how a Joint Workout process might work.
1. Fact-Finding Meeting
The first contact between the BorrowerBorrowerPerson who is the obligor per the Note. , Fannie Mae and the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. will be a fact-finding meeting and will focus on:
2. Fannie Mae and Lender Meeting
A separate meeting between Fannie Mae and the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. will focus on:
It is important that any differences between Fannie Mae and the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. be resolved at this meeting. If the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. ’s contribution to the Joint Workout or a modification to its servicing or loss sharing obligations must be documented, this must be included in a separate document between Fannie Mae and the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. .
3. Workout Meeting with Borrower
If a Joint Workout appears feasible, Fannie Mae and the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. will schedule a workout meeting with the BorrowerBorrowerPerson who is the obligor per the Note. . All parties, including Fannie Mae, the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. , the BorrowerBorrowerPerson who is the obligor per the Note. , and their respective legal counsel, must attend and must allow enough time to facilitate a workout. Those in attendance must have authority to execute documents pursuant to a signed Pre-Negotiation Letter. Experience indicates that to be most productive, the workout meeting should start early in the morning and continue until a deal is reached or the parties agree to disagree.
4. Letter of Intent
If agreement is reached on all of the terms of the Joint Workout, counsel will draft a non-binding letter of intent, to be executed during the workout meeting. This letter of intent will set forth each party’s agreements and obligations until the formal, written modification documents are completed. The letter of intent must be specific enough to fully reflect the intent of the parties (other than any modifications to the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. ’s servicing or loss sharing obligations). Until the formal modification documents are completed and executed by all parties, there has been no modification of the terms of the Non-Performing Mortgage LoanNon-Performing Mortgage LoanMortgage Loan that is subject to an uncured default. or the BorrowerBorrowerPerson who is the obligor per the Note. ’s obligations.
The LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. is not permitted to charge or collect from the BorrowerBorrowerPerson who is the obligor per the Note. a fee for any modification, extension, or forbearance of a 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. without the prior written consent of Fannie Mae. If the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. has a loss sharing obligation to Fannie Mae, then Fannie Mae and the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. may jointly elect to charge the BorrowerBorrowerPerson who is the obligor per the Note. a modification, extension or forbearance fee. If Fannie Mae and the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. elect to charge such fee, and so long as the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. has a loss sharing obligation to Fannie Mae, Fannie Mae will share such fee with the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. on the basis of:
If a Triggering Modification has occurred, a Triggering Modification Interim Loss Sharing calculation was made and a reserve was established against the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. ’s Operational Liquidity (as provided in the Loss Sharing Addendum), any fees other than those provided for in Part V, Chapter 7: Non-Performing Mortgage Loans, Section 711.04D: Modification, Extension, and Forbearance Fees shall be split between Fannie Mae and the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). in accordance with their respective loss sharing percentages at the time of the Triggering Modification (taking into account any Modified Risk Loss Sharing applicable to 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. ). Except as provided in Part V, Chapter 7: Non-Performing Mortgage Loans, Section 711.04D: Modification, Extension, and Forbearance Fees with respect to modification, extension and forbearance fees, and any fees required by Fannie Mae in connection with a Triggering Modification, no other fees required by Fannie Mae in connection with a 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. modification, extension or forbearance shall be split between the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. and Fannie Mae.
The discussions with the BorrowerBorrowerPerson who is the obligor per the Note. in attempting to reach agreement on a Joint Workout are part of Track One of the Dual Track Approach (maintaining dialogue with the BorrowerBorrowerPerson who is the obligor per the Note. to attempt to resolve the defaults) as outlined in this Chapter. Accordingly, Track Two, the Foreclosure Track, of the Dual Track Approach will continue and will not be postponed or delayed until agreement with the BorrowerBorrowerPerson who is the obligor per the Note. has been reached and the Joint Workout has been documented. If the Joint Workout is proceeding and is likely to be consummated, Fannie Mae may agree to reschedule (but not cancel) the foreclosure sale. If the parties are unable to agree on a Joint Workout, the parties shall continue to pursue the Track Two approach and proceed to foreclosure or such other Fannie Mae-approved course of action.
