Business News

Big changes to investor reporting are right around the corner

By Cathie Ericson | October 25, 2016


Big changes to investor reporting are right around the cornerThe countdown to February 2017 is on.

The Grammys? World Cancer Day? The Big Game?

Well, yes, yes, and yes. But even more important to Fannie Mae’s servicers is that next February is the deadline for complying with changes coming to Fannie Mae’s investor reporting process.

Fannie Mae requires the changes to integrate with the Common Securitization Platform (CSP). CSP is a joint Fannie Mae-Freddie Mac initiative to develop a single mortgage-backed security issued by the government-sponsored enterprises (GSEs) to finance fixed-rate mortgage loans backed by one- to four-unit single-family properties.

The changes will:  

  • Standardize data reporting.
  • Enable daily reporting to address data issues faster.
  • Eliminate pay-outs by servicers for over-collateralized pool amounts.
  • Harmonize timing of the GSEs’ Single-Family single class monthly disclosures.
  • Lower risk by distributing activity throughout the month.

“We’ve made significant progress partnering with servicers and vendors on this important strategic initiative,” says Pat Fulcher, vice president and business initiative lead for Fannie Mae. “This effort is an important early step toward positioning us for CSP integration."

Servicers must update their business processes and technology this fall in preparation for the changes.

“We know that once the hard work of implementation is complete, servicers will appreciate the many benefits these changes will offer and how they align with industry best practices,” says John Jozwiak, director of single-family replatforming for Fannie Mae.

Finish in Sight

Fannie Mae began communicating the changes in November 2014 and has met with customers regularly about the requirements and to answer their questions.

“The team is actively engaged with the industry to ensure these changes are implemented in a timely and successful manner,” says Rick Sorkin, Fannie Mae’s senior vice president of securitization for Capital Markets. “These modifications will facilitate the way servicers interact with us.”

There are four key changes:

  • Servicers won’t have to report Single-Family MBS SWAP security balances to Fannie Mae.
  • Investor reporting due dates will align with Scheduled/Scheduled (S/S), Scheduled/Actual (S/A), and Actual/Actual (A/A) remittance type mortgage loans.
  • Removal transactions (e.g., payoffs, repurchases, and foreclosures) will need to be reported by the first business day after processing the transaction.
  • On a case-by-case basis, servicers will reinstate erroneously liquidated loans to whole loan (cash) portfolio, instead of re-adding to securities (so long as the servicer is deemed not to be at fault for the error).

In August 2016, Fannie Mae distributed the “Operational Readiness Checklist and Acknowledgement Form,” which servicers must sign and return by Dec. 1.

“The goal is to walk servicers through the key milestones we published on the website in January 2015 for these changes,” Jozwiak says.

Change Agents

Some vendors and servicers have been involved with the initiative.

Black Knight Financial Services has been working closely with Fannie Mae since 2014 on the investor reporting changes to help servicing clients prepare for this important initiative, says George FitzGerald, executive vice president of solutions management for Black Knight’s servicing technologies division.

“Black Knight is making the necessary enhancements to our servicing system and continuing to keep our clients informed on our progress through various communications and working groups,” says FitzGerald. “We hope these activities will facilitate faster adoption of Fannie Mae’s investor reporting changes and improve efficiencies with loan-level reporting processes.”

Other servicers say being able to report throughout the month will be beneficial.

“Not only does it balance the workload, but it allows servicers to work through errors or rejects daily rather than having to manage issues all at one time in the reporting cycle,” says Shailey Bhatt, Fannie Mae’s investor reporting operations director.

What Servicers Need to Know

This fall, Fannie Mae is working with servicers to ensure operational readiness – including procedures, controls, and training – so the servicer’s staff will be prepared. “The technology has to work, but that’s only one piece,” Bhatt says, adding that servicers must develop training materials, documenting policies, reporting procedures, and contingency plans.

And there’s no time to lose.

“The months have ticked by, and the new processes are upon us,” says Jozwiak. “If you haven’t been engaged, start focusing on what specifically is changing to make sure you’re operationally ready in February,” he suggests. “With the holidays coming, there’s no time to lose.”

For more information, read Future Changes to Investor Reporting.

Cathie Ericson is a freelance writer for The Oregonian,,, and other online and print publications and has been writing for Housing Industry Forum since its launch.