Servicing Guide

Published June 13, 2018

D2-2-07: Resolving an Appeal of a Mortgage Loan Modification Trial Period Plan Denial for a Principal Residence (05/10/2017)

This topic contains information on resolving an appeal of a mortgage loan modification Trial Period Plan denial for a principal residence only.

For information on identifying an appeal of the denial of a mortgage loan modification Trial Period Plan, see Establishing Written Policies or Procedures in A4-1-01, Staffing, Training, Procedures, and Quality Control Requirements. The servicer must confirm that an appeal in connection with a complete BRP that satisfies these requirements is a written request for an appeal that includes the following:

  • borrower’s name,

  • property address, and

  • mortgage loan number.

In order for the borrower to be eligible for an appeal of a denial of a mortgage loan modification Trial Period Plan, the following conditions must be met:

  • the mortgage loan must be secured by a principal residence, and

  • the borrower must have submitted a complete BRP 90 days or more before a scheduled foreclosure sale date, or the foreclosure sale date is unknown.

The appeal requirements do not apply if the borrower previously submitted a complete BRP and the mortgage loan has been delinquent at all times since submitting the prior complete BRP, as authorized by applicable law.

The servicer must inform the borrower that he or she may submit any supporting documentation and specific appeal reason at the time the servicer is notified of the appeal.

The servicer must provide written notice of the appeal decision within 30 days of receipt of the borrower’s appeal. The following table describes the servicer’s requirements for handling an appeal depending upon when the appeal is received.

If the servicer receives… Then the servicer…

the borrower’s appeal within the 14-day appeal period and any new information

must evaluate the appeal and accept any new information submitted by the borrower within this time frame as part of the independent appeal review.

the borrower’s appeal within the 14-day appeal period, but the servicer receives any new information or documentation after the 14-day appeal period but before the appeal decision is issued

is authorized to

the borrower’s appeal after the 14-day appeal period

The servicer must not require that the borrower accept any initial offer for a workout option prior to resolution of the appeal.

The following table describes the servicer’s requirements after review of an appeal if the servicer determines that the borrower was eligible for a mortgage loan modification Trial Period Plan for which the borrower was previously denied.

The servicer must...

Send the borrower an offer for such a Trial Period Plan for which the borrower was initially denied.

Provide the borrower 14 days from the date of the servicer’s appeal decision notice to indicate his or her intent to accept either the new offer or the initial offer, provided that the borrower continues to be eligible for the initial offer, in accordance with Sending a Notice of Decision on a Workout Option in D2-2-05, Receiving a Borrower Response Package.

If the borrower waits to accept the initial offer until after receiving the appeal decision, the servicer must take the actions in the following table.

The servicer must...

Determine whether the borrower continues to be eligible for the initial offer without considering any accrued amounts.

Adjust the due dates of the initial offer, as applicable, accordingly.

The servicer must adjust the payment amount in instances where additional amounts have accrued and/or the due dates of the initial offer have changed because the borrower was awaiting the outcome of the appeal decision by taking the actions in the following table.

The servicer must...

Adjust the payment amount of the initial offer.

Note: For Trial Period Plans, the servicer is authorized to adjust the payment amount at the beginning of the Trial Period Plan or after the borrower’s successful completion of the Trial Period Plan.

Use the same approach to adjusting the payment amount consistently on all mortgage loans it services for Fannie Mae.

Reissue the initial offer to reflect any adjusted dates and/or payment amounts.

If the borrower waits to accept the initial offer until after receiving the appeal decision, the first payment due date of any resulting mortgage loan modification Trial Period Plan offer, and the revised first payment due date for the initial offer, as applicable, is based on when the appeals decision is sent by the servicer to the borrower, as described in the following table.

If the servicer sends the appeal decision... Then the Trial Period Plan effective date and the due date of the first Trial Period Plan payment is...

on or before the 15th of the month

the first day of the next month.

after the 15th of the month

the first day of the month after the next month.

The servicer’s appeal decision is final and not subject to further appeal. The servicer must make information related to the appeals process available to Fannie Mae upon request.

Related Announcements

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

Announcements Issue Date
Announcement SVC-2017-04 May 10, 2017