Servicing Guide

Published September 18, 2018

A1-3-06: Automatic Reclassification of MBS Mortgage Loans (09/18/2018)

This topic contains the following:

Selecting MBS Mortgage Loans for Reclassification by Fannie Mae

Rather than requiring the servicer to repurchase certain delinquent MBS mortgage loans that are serviced under the special servicing option—those for which Fannie Mae has the entire foreclosure loss risk and those for which Fannie Mae and the servicer share the foreclosure loss risk, with Fannie Mae having the responsibility for marketing the acquired property—Fannie Mae will reclassify a mortgage loan that satisfies its selection criteria as an actual/actual remittance type portfolio mortgage loan (however, PFP mortgage loans with an original scheduled/scheduled remittance type will remain a scheduled/scheduled remittance type even after being removed from the pool).

Generally, Fannie Mae will select mortgage loans that have at least three monthly payments past due for reclassification in the month when the fourth payment is delinquent. The following table provides additional reclassification timing requirements that apply to an MBS mortgage loan that has an MBS pool issue date on or after June 1, 2007 through December 1, 2008 and is performing on a forbearance plan or repayment plan.

Workout Option Timing of reclassification for an MBS mortgage loan that has an MBS pool issue date on or after June 1, 2007 through December 1, 2008
Forbearance plan After the sixth consecutive month.
Repayment plan 18 months from the first day of the month in which the plan commences (its inception).

The servicer must follow the procedures in F-1-28, Reclassifying or Voluntary Repurchasing an MBS Mortgage Loan for handling the mortgage loans that Fannie Mae has selected for reclassification.

All MBS mortgage loans (regular servicing and special servicing option mortgage loans) removed from MBS pools will be held in Fannie Mae’s portfolio subject to repurchase requirements. The servicer remains responsible for the recourse obligation on a regular servicing option mortgage loan that is removed from the pool and held in Fannie Mae’s portfolio.

Changes to the Servicer’s Records

The servicer must change its internal records to reflect the appropriate reclassification remittance type, as described in the Investor Reporting Manual and F-1-28, Reclassifying or Voluntary Repurchasing an MBS Mortgage Loan.

Related Announcements

The following table provides references to Announcements that are related to this topic.

Announcements Issue Date
Announcement SVC-2018-06 September 18, 2018
Announcement SVC-2015–10 July 8, 2015