Lenders must use security instruments for conventional mortgages that are correct for the applicable jurisdiction, mortgage type, lien type, property type, and transaction type. Security instruments for regularly amortizing mortgages include the Fannie Mae/Freddie Mac Uniform Mortgages, Deeds of Trust, and Security Deeds.
In some cases, the uniform security instruments may have to be adapted to meet the lender’s needs or local jurisdictional requirements. If, however, a security instrument is modified in any way, Fannie Mae will consider it to be a nonstandard document, which means the lender’s delivery of the loan is subject to Fannie Mae’s requirements for nonstandard documents. For more information on the warranties a lender makes when it sells Fannie Mae mortgages closed on nonstandard documents, see A2-2.1-03, Document Warranties.
The current versions of the Fannie Mae standard first mortgage security instruments are posted on Security Instruments. The website also contains instructions for use of these documents, including any required changes and some changes that may be made at lender’s option, called “authorized changes.” Lenders must make sure that any changes they make, including changes authorized by Fannie Mae, comply with all applicable laws.
The standard uniform security instruments are used for almost all types of regularly amortizing mortgages. In some instances, the standard security instruments must be modified by a rider. For example, a rider is needed for an adjustable-rate mortgage as well as for a security property that is a one-unit dwelling that is used as a second home or an investment property, or that is a two- to four-unit property or a unit in a PUD or condo project. For more information about these riders, see B8-4-01, Riders and Addenda.
Lenders may elect to deliver first-lien mortgage loans to Fannie Mae using a master form mortgage or deed of trust (“Master Form”) and short form mortgage or deed of trust (“Short Form”) in states with statutes that allow for the use of these forms. The uniform Master Form and Short Form documents may be used in lieu of the current version of the Fannie Mae/Freddie Mac uniform first mortgage security instruments.
Under applicable state law, lenders may record a Master Form in a given recording jurisdiction, and then may subsequently record a Short Form for any mortgage loan originated in that jurisdiction.
The Master Form consists of a title page, which contains the state-specific requirements for a master security instrument, and the current long form uniform security instrument for that state. The Short Form contains the loan-specific information (for example, borrower name, lender name, loan amount, description of property, etc.) and identifies the provisions of the Master Form that are being incorporated into the Short Form. Any applicable riders to the security instrument must be attached to the Short Form. The borrower must execute the Short Form document and any applicable riders. The lender must provide the borrower with a copy of the recorded Master Form as well as the signed Short Form and any applicable riders.
The documents are available for 27 states and are posted on Legal Documents.
Fannie Mae does not provide second mortgage security instruments; therefore, lenders must use second mortgage security instruments that their attorneys have developed or otherwise approved.
Fannie Mae expects the second mortgage security instruments to be similar to first mortgage security instruments with respect to fairness to the borrower and the lender. For example, arbitration is not acceptable under Fannie Mae’s standard terms for first mortgages and the same is true for second mortgages. The lender must make the same or comparable nonstandard document warranties required for first mortgages that are not closed on Fannie Mae documents (see A2-2.1-03, Document Warranties).
The table below provides references to the Announcements that have been issued that are related to this topic.