Servicing Guide

Published September 18, 2018

C-1.2-03: Processing Payments in Full (11/12/2014)

The servicer must provide payoff statements to the borrower or his or her agent, when requested. The servicer must also collect and remit sufficient funds to Fannie Mae to satisfy the debt and ensure the proper accounting and reporting of the mortgage loan payoff, once received.

The servicer must follow the procedures in Satisfying the Mortgage Loan and Releasing the Lien in F-1-11, Processing Mortgage Loan Payments and Payoffs for additional instructions related to payoff processing.

This topic contains the following:

Applying Funds Remaining in an Interest Rate Buydown Plan Account

The servicer must apply any funds remaining after payoff in an interest rate buydown plan account in accordance with the applicable mortgage loan agreement. If the servicer is holding the remaining buydown funds, it must include them with its remittance of the payoff proceeds. The servicer must follow the procedures in Applying Funds Remaining After Payoff in an Interest Rate Buydown Account in F-1-09, Processing Mortgage Loan Payments and Payoffs for specific instructions for applying buydown funds after payoff of the mortgage loan.

Collecting and Accounting for HomeSaver Advance Notes

The servicer must be able to identify whether the borrower on a first lien mortgage loan currently has an HSA note, and reference it in any payoff statement it issues for the first lien mortgage loan.

In the event of a sale or transfer of the property, this reference must remind the borrower that the HSA note is due and payable in full.

In the event of a refinance, this reference must clearly

  • remind the borrower that the HSA note must continue to be paid, and

  • state that payoff of the HSA note is not required to release the first lien mortgage loan.

If the borrower or servicer of the first lien mortgage loan needs information related to an HSA note (such as where to send a payment), the servicer may send a request for information to Fannie Mae’s SF CPM division (see F-4-03, List of Contacts). The servicer must be able to promptly redirect any HSA note payments received to the party designated by Fannie Mae.