F-1-09, Processing Mortgage Loan Payments and Payoffs (10/19/2016)

Instruments dated March 1999 or later

1. Interest

2. Principal

3. Deposits for escrow items, as applicable. Such deposits may include:

• taxes and assessments;

• property or MIPs;

• leasehold payments or ground rents; and

• community association dues, fees, and charges.

4. Late charges, if any

Instruments dated before March 1999

1. Deposits for insurance and taxes, if applicable

2. FHA service charges, if applicable

3. Interest

4. Principal

5. Late charges, if any

a fixed-rate first lien mortgage loan

30 days’ interest on the UPB as of the LPI date and using the current accrual rate.

a fixed-rate first lien biweekly mortgage loan

14 days’ interest on the UPB as of the LPI date and using the current interest accrual rate.

a fixed-rate second lien mortgage loan

each monthly payment using the payment-to-payment calculation method, when this is required by the security instrument. Otherwise, interest must be determined as outlined above.

an ARM loan

each monthly payment based on its applicable effective interest accrual date.

with the scheduled monthly payment

apply the scheduled monthly payment first, then apply the principal curtailment.

at any other time of the month, separately

apply the principal curtailment first, then apply the next scheduled monthly payment.

Collect any funds advanced on behalf of the borrower.

Remit the repayment as a special remittance to Fannie Mae, and within 30 days of the payoff date, if Fannie Mae advanced the funds.

• VA

• RD

• FHA Title I

• Conventional first lien and second lien mortgage loans

• FHA loans that are being refinanced as “new”

up to, but not including, the day the payoff funds were received.

• All other FHA mortgage loans (regardless of the date they were endorsed for MI)

• HUD-guaranteed Section 184 loans

• up to the date of payoff, for payoff funds received on an installment due date; or

• through the end of the month, for payoff funds received after an installment due date.

Have a negotiated contract that specifically provides for the enforcement of a prepayment premium.

Meet the guidelines set out in the Selling Guide, B8–3–02, Special Note Provisions and Language Requirements.

Advise Fannie Mae of the collection of the premium when it next reports a LAR, regardless of whether Fannie Mae permits the servicer to retain the prepayment premium or requires it to remit the premium to Fannie Mae.

Reduce the payoff amount by the amount of any remaining buydown funds.

Not subtract the buydown funds from the mortgage loan balance because an incorrect interest calculation would result.

Remove Fannie Mae’s interest (or that of the mortgagee of record) from all applicable property insurance policies.

Notify the taxing authorities that future tax bills should be sent to the borrower (or to the servicer of the first lien mortgage loan if only a second lien mortgage loan is paid off).

Prepare and execute the appropriate release or satisfaction documents identified by the Fannie Mae loan number and, if applicable, the MERS MIN.

Send the satisfaction or release documents, and a request for the assignment of the custody documents, to the following address:

Fannie Mae

Vendor Oversight

Legal Document Execution

13150 Worldgate Drive

Herndon, VA 22070

Note: Fannie Mae will return the executed documents promptly to the servicer.

Notify the mortgage insurer or guarantor of the payoff.

If the mortgage loan is an eMortgage, update the MERS eRegistry with information of the payoff, charge-off, or assumption.

Advise MERS to deactivate the MERS registration for the mortgage loan, if applicable.

If the eMortgage is secured by property in a state that requires the return of a paper Note upon loan payoff, provide the borrower of an eMortgage a paper copy of the eNote marked “Copy” and “Paid-In-Full” and include:

• a letter to the borrower explaining that the borrower is receiving a paper copy of the eNote which was originally registered in the MERS eRegistry, and that the servicer has caused the eNote to be deactivated on the MERS eRegistry due to payment in full, and

• other documents and information required by applicable law.

Remit Fannie Mae’s share of the payoff proceeds in accordance with the remittance schedule established for the remittance type under which the mortgage loan is reported.

Code the payoff as Action Code 60 when it next reports a LAR to Fannie Mae through Fannie Mae’s investor reporting system.