Servicing Guide

Published September 18, 2018

F-1-28: Reclassifying or Voluntary Repurchasing an MBS Mortgage Loan (09/18/2018)

This Servicing Guide Procedure contains the following:

  • General Requirements for a Reclassified MBS Mortgage Loan

  • Reclassifying a Pooled from Portfolio Mortgage Loan

  • Reclassifying an MBS Mortgage Loan Performing on a Forbearance Plan or a Repayment Plan

  • Reclassifying or Voluntary Repurchasing an MBS Mortgage Loan for a Mortgage Loan Modification

General Requirements for a Reclassified MBS Mortgage Loan

Under certain circumstances described in the Servicing Guide and below, Fannie Mae will remove a mortgage loan or compel the servicer to remove a mortgage loan from an MBS pool and place it in Fannie Mae’s portfolio. With the exclusion of PFP mortgage loans with a scheduled/scheduled remittance type, MBS mortgage loans (regular and special servicing option mortgage loans) removed from MBS pools in this manner will become actual/actual remittance type mortgage loans that Fannie Mae will hold in its portfolio, identifying them by the Fannie Mae loan number, the servicer’s loan number, and the property address. PFP mortgage loans with an original scheduled/scheduled remittance type will remain a scheduled/scheduled remittance type even after being removed from the pool.

The servicer must comply with all payment processing, remitting, accounting, and reporting requirements related to servicing reclassified mortgage loans as outlined in A4-1-02, Establishing Custodial Bank Accounts, and C, Mortgage Loan Payment Processing, Remitting, Accounting, and Reporting. If necessary, the servicer must contact its Fannie Mae Investor Reporting Representative (see F-4-03, List of Contacts) for assistance.

When a mortgage loan has been reclassified, the servicer must take the actions as outlined in the following table.

After an MBS mortgage loan has been reclassified, the servicer must...

Report the mortgage loan as an actual/actual remittance type, including any activity that occurred for a reclassified mortgage loan after the date that the servicer notified Fannie Mae of its deselections for the month.

Note: PFP mortgage loans with a scheduled/scheduled remittance type will remain a scheduled/scheduled remittance type even after being removed from the pool.

Use the same Fannie Mae loan number that applied to the mortgage loan when it was in the MBS pool.

Update its internal records to reflect the change in remittance type, if any, as of the first day of the month in which the automatic reclassification takes place.

Note: The PTR for a reclassified mortgage loan is equal to the sum of its previous PTR and its previous guaranty fee rate; therefore, the servicer can retain the same servicing compensation that it received while the mortgage loan was in the MBS pool.

Reclassifying a Pooled from Portfolio Mortgage Loan

The servicer may confirm that Fannie Mae has reclassified a PFP mortgage loan by reviewing the PFP Reclass Report that is posted on SURF.

Reclassifying an MBS Mortgage Loan Performing on a Forbearance or Repayment Plan

A1-3-06, Automatic Reclassification of MBS Mortgage Loans describes the mortgage loans that Fannie Mae will select for reclassification. On approximately the 11th calendar day of each month, Fannie Mae will post the Eligible for Deselection Report on Fannie Mae’s servicing solutions system containing the MBS mortgage loans that have been reported to Fannie Mae with a delinquency status code of forbearance plan or repayment plan that Fannie Mae intends to reclassify. The following table outlines the actions that the servicer must take to deselect a mortgage loan for reclassification, as applicable.

Step Servicer Action
1

Review the report provided by Fannie Mae on Fannie Mae’s servicing solutions system.

2

Determine whether any mortgage loan identified should be reclassified based on real-time information that the servicer has for the mortgage loan.

3

By the 15th day of the month in which it is notified, deselect those mortgage loans that either

  • are current;

  • will be reported with a delinquency status code to indicate that the mortgage loan is no longer in a forbearance plan or repayment plan, as applicable;

  • the servicer is working with the borrower on a workout option; or

  • the servicer has commenced or resumed collection activities leading to foreclosure proceedings.

A mortgage loan that continues to have a delinquency status code indicating that it is in forbearance for six consecutive months without indicating a delinquency status code change in the month of notification will be removed from the MBS pool by Fannie Mae.

Reclassifying or Voluntary Repurchasing an MBS Mortgage Loan for a Mortgage Loan Modification

The servicer must ensure that an MBS mortgage loan is removed from the MBS pool for the purposes of modification in accordance with D2-3.1-02, Conditions of a First and Second Lien Mortgage Loan Modification for an MBS Mortgage Loan.

The following table outlines the actions the servicer must take to reclassify an MBS mortgage loan or voluntary repurchase for a regular servicing option mortgage loan or a shared-risk special servicing option mortgage loan for which the servicer’s shared risk liability has not expired based on the mortgage loan status at the time the mortgage loan modification is negotiated.

If, at the time the mortgage loan modification is negotiated... Then...

the borrower’s payment default is imminent

Fannie Mae will reclassify or the servicer will voluntary repurchase, as applicable, the mortgage loan during the fourth month of the Trial Period Plan if

  • the borrower has made the fourth payment of a four-month Trial Period Plan, and

  • the servicer has notified Fannie Mae of receipt of the payment on or before the 15th calendar day (the servicer’s reclassification date) of the fourth month of the Trial Period Plan.

payment default has already occurred

Fannie Mae will reclassify or the servicer will voluntary repurchase, as applicable, the mortgage loan during the third month of the Trial Period Plan if

  • the borrower has made the third payment of a three-month Trial Period Plan, and

  • the servicer has notified Fannie Mae of receipt of the payment on or before the 15th calendar day (the servicer’s reclassification date) of the third month of the Trial Period Plan.

If the final Trial Period Plan payment (either third or fourth Trial Period Plan payment as applicable depending on the original mortgage loan status) is received after the 15th calendar day (the servicer’s reclassification or voluntary repurchase date) of the final month of the Trial Period Plan but before the end of the Trial Period Plan, then it will not be possible to reclassify or voluntary repurchase the mortgage loan from the MBS pool during the final month of the Trial Period Plan. In such event, the servicer must extend the Trial Period Plan one month, and the reclassification or voluntary repurchase date will be the 15th calendar day of such extended month. If the servicer has not notified Fannie Mae of its receipt of the final Trial Period Plan payment on or before the servicer’s reclassification or voluntary repurchase date, the servicer shall extend the Trial Period Plan for an additional month.

If the required Trial Period Plan payments are not made in accordance with the Trial Period Plan, Fannie Mae will cancel the case in Fannie Mae’s servicing solutions system.

The following table outlines the actions that the servicer must take after a mortgage loan has completed the Trial Period Plan.

The servicer must...

Confirm that Fannie Mae has reclassified an MBS mortgage loan by obtaining the Purchase Advice from SURF. If Fannie Mae does not include the mortgage loan in its list of mortgage loans due for reclassification before the month in which the modified terms become effective, the servicer must contact its Fannie Mae Servicing Representative (see F-4-03, List of Contacts).

After a mortgage loan is reclassified, follow the existing procedure and update the Officer Signature Date in Fannie Mae’s servicing solutions system to close the mortgage loan modification case.

Apply all subsequent payments in accordance with the terms of the modified 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-2017–01 January 18, 2017

Announcement SVC-2015–10

July 8, 2015