A

accrual rate
The rate at which interest is calculated; for a particular remittance date for an MBS pool, it is the mortgage interest rate due under the terms of the mortgage note during the period beginning on the second day of the month preceding the remittance date and ending on the first day of the month in which such remittance date occurs, less the servicer’s servicing spread.
acquired bifurcated mortgage loan
A bifurcated mortgage loan that has been through foreclosure or Mortgage Release but has not been sold by Fannie Mae.
acquired property
A property for which Fannie Mae has gained title through foreclosure or acceptance of a Mortgage Release (deed-in-lieu of foreclosure); often referred to as real estate owned (REO).
active bifurcated mortgage loan
A bifurcated mortgage loan that has not been foreclosed upon.
active document custodian
An entity that has certified MBS or portfolio mortgage loans for Fannie Mae in the previous calendar year.
actual/actual remittance type
A remittance type that requires the servicer to remit to Fannie Mae only the actual interest due (if it is collected from borrowers) and the actual principal payments collected from borrowers.
appeal process
The first appeal process and the second appeal process that a seller/servicer or other responsible party can use to appeal a demand for a servicing remedy.
ARM Flex®
ARM MBS pools that provide interest accruals at a weighted-average pool accrual rate (which is developed by using either a fixed MBS margin or a weighted-average MBS margin). Because the application of the interest rate caps for the mortgage loan and the pool will coincide, the PTR for a mortgage loan will not increase on any change date in which the interest rate cap limits the interest rate that is charged to the borrower.
ARM Flex Plus®
ARM MBS pools that provide interest accruals at a weighted-average pool accrual rate (which is developed by using a fixed MBS margin) and allow interest rate caps to be applied independently to the individual mortgage loans in the pool and to the PTR for the pool. This means that the PTR for a mortgage loan may continue to increase even when no further increases can be made to the borrower’s interest rate.
assignment of rents
A transaction in which the purchaser (or transferee) of real property takes over or is added to the existing mortgage loan; the seller (or transferor) remains liable for the mortgage loan unless released by the lender or servicer from this obligation. The terms indicating whether or not the mortgage loan is assumable is determined by the security instrument.
assumption
A transaction in which the purchaser (or transferee) of real property takes over or is added to the existing mortgage loan; the seller (or transferor) remains liable for the mortgage loan unless released by the lender or servicer from this obligation. The terms indicating whether or not the mortgage loan is assumable is determined by the security instrument.

B

bankruptcy cramdown
A process by which a bankruptcy court divides a borrower’s debts into secured and unsecured portions. For a mortgage debt, the secured portion is equal to the current appraised value of the property and the unsecured portion is equal to the difference between the UPB of the mortgage loan and the appraised value of the property. The borrower is placed under a payment plan that will result in some of the unsecured debt being paid off in three to five years. If the borrower successfully completes the repayment plan, the remainder of the unsecured debt is discharged.
beneficial easement
An easement is that generally enhances the use or value of a property by allowing the property owner a limited use of another property, usually a contiguous property.
bifurcated mortgage loan
A mortgage loan or property for which the current servicer is not the responsible party for the selling representations and warranties and/or for the prior servicing responsibilities or liabilities.
Borrower Response Package
All of the required documentation that the borrower is required to provide in response to a foreclosure prevention solicitation.
Borrower Solicitation Package
A standardized foreclosure prevention solicitation package that provides the borrower with information on all workout options and the required documentation that must be submitted to be evaluated for a workout option.
burdensome easement
An easement that may be detrimental to the use or value of the security property.
business day
A day other than (1) a Saturday or Sunday, (2) a day on which the Federal Reserve Bank of New York (or other agent acting as Fannie Mae’s fiscal agent) is authorized or obligated by law or executive order to remain closed, or (3) a day on which the main offices of Fannie Mae in the District of Columbia are scheduled to be closed. In this Guide, the word “day” without the modifier “business” refers to a calendar day.
buydown account
An account in which funds are held so that they can be applied as part of the monthly payment as each payment comes due during the period that an interest rate buydown plan is in effect.

C

call abandonment rate
The percentage of calls that are not intercepted by a live operator before being disconnected (pure data with no exclusions for servicer thresholds, service levels, or call blocking).
call blockage rate
The percentage of calls that did not connect internally with the servicer due to circuit unavailability or programmatic blockage of calls by the automated call distribution system.
call option
A provision in the mortgage that gives Fannie Mae the right to call the mortgage due and payable at the end of a specified period for whatever reason.
cancellation of MI
Notification by the mortgage insurer that it has cancelled coverage in connection with a specified mortgage loan as of a specified date due to a breach of one or more provisions of the applicable mortgage guaranty insurance policy.
capitalization
The addition of certain amounts due under the mortgage loan—such as T&I payments made by the servicer or delinquent interest installments—to the UPB of the mortgage loan, either because the borrower was unable to pay them or the servicer paid them on the borrower’s behalf.
Cash Remittance System (CRS)
The system used to process P&I remittances for portfolio mortgages, P&I remittances for MBS pools that have the RPM remittance cycle and a sixth of the month remittance date, and unscheduled P&I remittances for MBS pools that have the MBS Express remittance cycle, as well as special remittances for all mortgages.
cash reserves
Liquid assets such as cash, savings, money market funds, or marketable stocks or bonds (excluding retirement accounts).
claim denial (MI)
Notification by the mortgage insurer that a claim will not be paid in connection with a specified mortgage loan due to a breach of one or more provisions of the applicable mortgage guaranty insurance policy (for example, its obligation to produce documents).
clearing account
A bank account that is used for the temporary deposit of funds until they can be appropriately identified and transferred into a permanent account.
co-borrower
For Fannie Mae’s purposes, this term is used to describe any borrower other than the first borrower whose name appears on the mortgage note, even when that person owns the property jointly with the first borrower (and is jointly and severally liable for the note).
coinsurance clause
A provision in a property insurance policy that states the minimum amount of coverage that must be maintained—as a percentage of the total value of the property—in order for claims for insurance losses to be paid based on replacement costs up to the total coverage amount of the insurance policy.
compensatory fee
A fee Fannie Mae charges as compensation for damages that may be incurred as the result of a seller/servicer’s failure to comply with a specific policy or procedure or to emphasize the importance Fannie Mae places on a particular aspect of the seller/servicer’s performance.
concurrent mortgage loan sale
An exchange of mortgage loans of like terms and quality between Fannie Mae and another seller.
concurrent sales participation pool mortgage loan
A mortgage loan that is part of a participation pool that was created as a result of a concurrent mortgage loan sale.
condemnation
Depending on context, may refer to a determination that a building is not fit for use or is dangerous and must be destroyed, or the taking of private property for a public purpose through an exercise of the right of eminent domain.
conforming mortgage loan
A conventional mortgage loan that had an origination-date principal balance not exceeding the current Fannie Mae loan limit. (“Current” refers to when Fannie Mae purchased or securitized the mortgage.) If a mortgage was originated prior to the current year, the loan limit that was in effect on the origination date is disregarded.
cooperative (co-op) project
A residential or mixed-use building wherein a corporation or trust holds title to the property and sells shares of stock representing the value of a single apartment unit to individuals who, in turn, receive a proprietary lease as evidence of title.
cramdown
See bankruptcy cramdown.
credit score
When used by Fannie Mae, the classic FICO score developed by Fair Isaac Corporation.
curtailment
An additional principal payment.
custodial account
A bank account that a seller/servicer must establish to hold the funds of others—the borrower and Fannie Mae—as opposed to any account established to hold the seller/servicer’s corporate funds.
custody documents
The original mortgage note, an original unrecorded assignment to Fannie Mae (or a copy of the original recorded assignment), and, in some cases, the original MI or loan guaranty certificate, and, if the mortgage has been modified, the modification agreement.

D

data breach
An incident of unauthorized access or use of borrower information that results in any loss, unauthorized use, disclosure, unauthorized access, or unauthorized acquisition of information that is considered NPI (as defined by the Gramm-Leach-Bliley Act, 15 USC § 6809).
deferred payment obligation (DPO)
The unpaid portion of the MI claim where the failure to pay the full amount due on the claim is solely attributable to the mortgage insurer’s financial inability to pay or its insolvency.
deferred payment obligation (DPO) mortgage insurer
A mortgage insurer that is insolvent or has the financial inability to pay its claims in full.
delinquency advance
An amount advanced by a servicer in respect of interest or principal on one or more mortgage loans, as required by their servicing contract, even though the servicer has not collected the actual funds from the related borrowers.
demand
A demand issued by Fannie Mae to a seller/servicer or other responsible party to provide a specific servicing remedy as provided in the Lender Contract. The issuance of a notice of servicing defect or request for payment of compensatory fees is not considered a “demand.”
demand deposit account
A bank account in which the funds are available for withdrawal at any time without penalty.
deterioration
A loss in value that is caused by deterioration in the physical condition of a property’s improvements.
direct surety bond
A class of bond that is written to afford protection for the direct acts of the principal in the event of a loss caused by the principal’s negligence, lack of ability, or dishonest act.

E

early payment default underwriting review
A review of the seller’s initial underwriting for a mortgage loan that becomes delinquent during the early years of the mortgage term.
electronic
Relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
electronic mortgage (eMortgage)
A mortgage loan for which the promissory note and possibly other documents (such as the security instrument and mortgage loan application) are created and stored electronically rather than by using traditional paper documentation that has a pen and ink signature. Most (but not all) eMortgages typically consist of a paper security instrument and an electronic note. The terms “electronic mortgage,” “electronic mortgage loan,” “eMortgage,” and “eMortgage loan” used in this Guide have the same meaning.
electronic note (eNote or transferable record)
An electronic record under ESIGN and UETA that (1) would be a Promissory Note under the Uniform Commercial Code if the Electronic Record were in writing; (2) the issuer of the Electronic Record expressly has agreed is a Transferable Record; and (3) for purposes of ESIGN, relates to a mortgage loan secured by real property.
electronic note Vault (eNote Vault)
A secure storage solution that meets the requirements of ESIGN and UETA.
electronic record
A contract or other record created, generated, sent, communicated, received, or stored by electronic means.
electronic signature
An electronic sound, symbol, or process, attached to or logically associated with a contract or other record executed or adopted by a person with the intent to sign the record.
elimination
The process of removing a property from Fannie Mae’s real estate owned (REO) inventory system of record.
escrow deficiency
The amount of a negative balance in the escrow account, including advances the servicer has made on the borrower’s behalf for tax and insurance payments.
escrow shortage
The amount by which the current escrow account balance falls short of the target balance at the time of the escrow analysis.
excess yield
The amount by which the net note rate exceeds the sum of its required net yield and any specified minimum servicing fee. For ARM loans, this also may be the amount by which the net mortgage margin exceeds its required margin.

F

Fannie Mae losses
Losses, damages, penalties, settlements, liabilities, judgments, claims, counterclaims, defenses, actions, costs, expenses, attorney fees, and other legal fees (also referred to as “losses incurred by Fannie Mae”).
Fannie Mae Portfolio
A seller/servicer’s Fannie Mae portfolio includes mortgage loans or participation interests in MBS pools, first and second mortgage loans held in Fannie Mae’s portfolio, Fannie Mae’s participation interests in first or second mortgage loans in participation pools held in its portfolio, and multifamily mortgage loans.
Fannie Mae's servicing solutions system
Refers to Fannie Mae technology used for reporting delinquent mortgage loan status information and workout case submissions, including HSSN™ and/or Fannie Mae's Servicing Management Default Utility (SMDU™)
Fannie Majors
See multiple pool.
financed MIP
An MIP for which the borrower is not required to make an advance payment from his or her own funds. Rather, the amount required to pay for a lump-sum premium is financed by including it as part of the original mortgage loan amount.
forbearance plan
A retention workout option for borrowers with a temporary unresolved hardship that provides for a period of reduced or suspended payments. A forbearance plan may be followed by either a full reinstatement, mortgage loan payoff, or workout option to enable the borrower to resolve the delinquency.
foreclosure sale rescission
The legal process of reversing a foreclosure sale and removing Fannie Mae as titleholder to the property.
full payment amount
For ARM loans, the monthly payment required, at each interest change date, to amortize the then outstanding principal balance at the new interest rate over the remaining mortgage term.

G

group home
A residential structure utilized for occupancy by persons with disabilities.
guaranty fee
Compensation that a seller pays Fannie Mae for the right to participate in the MBS program.
guaranty fee buydown
An agreement to reduce the guaranty fee remittance rate for an MBS mortgage loan below the contractual rate for the applicable servicing option and remittance cycle in return for the seller’s payment of a fee to Fannie Mae.
guaranty fee buyup
An agreement to increase the guaranty fee remittance rate for an MBS mortgage above the contractual rate for the applicable servicing option and remittance cycle in return for Fannie Mae’s paying a fee to the lender.

H

home mortgage loan
A residential mortgage loan secured by a one- to four-unit property.
HomeStyle Renovation mortgage
A mortgage that enables eligible borrowers to obtain financing to renovate, remodel, repair, or upgrade their existing home or a home that they are purchasing.
housing counseling
Counselor-to-client assistance provided by a HUD-approved counseling agency that involves the creation of an action plan to address unique financial circumstances and housing issues, and focuses on overcoming specific obstacles to achieve housing goals, such as:

I

impasse process
An option available to a seller/servicer or other responsible party for challenging a demand for a servicing remedy after the conclusion of the appeal process.
imputed interest
The interest that Fannie Mae assesses on a loan after it has been foreclosed or liquidated in order to compensate it for the loss of the use of the funds advanced.
inactive document custodian
An entity that has not certified MBS or portfolio mortgage loans for Fannie Mae in the previous calendar year but is holding mortgage loans in custody for Fannie Mae.
independent dispute resolution process
The process for resolving loan-level disputes involving a breach of the Lender Contract. Also referred to as “IDR.”
institutional lender
A financial institution that invests in mortgage loans and keeps them in its own portfolio.
inter vivos revocable trust (or living trust)
A trust that an individual creates during his or her lifetime that becomes effective during his or her lifetime, but which can be changed or canceled at any time for any reason during its creator’s lifetime.
interest accrual rate
The percentage rate at which interest accrues on the mortgage. In most cases, it is also the rate used to calculate the monthly payments, although it is not used for ARM loans with payment change limitations.
interest rate differential
See yield difference.
issue date
The first day of the month in which securities backed by an MBS pool are issued.
issue date principal balance
The principal balance of each mortgage loan in an MBS pool after crediting the principal portion of any monthly payments due on or before the issue date for the related securities (whether or not it was actually collected) and after crediting any unscheduled partial payment or other recovery of principal received on or before the issue date (as long as it was not accompanied by payment of an interest amount that represented scheduled interest due for the month after the payment was made).

J

no applicable terms

K

No Applicable Terms

L

leasehold estate
A way of holding title to a property wherein the borrower does not actually own the property, but rather has a recorded long-term lease on it.
lender-purchased MI
MI coverage for a conventional mortgage loan that the seller pays for by using its own funds, rather than requiring the borrower to include periodic accruals for such coverage as part of his or her monthly payment.
limited payment amount
The monthly payment established for an ARM loan when the mortgage limits the amount by which a payment can change. It will not be sufficient to fully amortize the mortgage loan so it will result in negative amortization.
loan-level price adjustment (LLPA)
LLPAs are assessed based on certain eligibility or other loan features, such as credit score, loan purpose, occupancy, number of units, product types, etc.

M

make whole amount
The amount that must be realized from a property disposition to avoid incurring a loss. For a foreclosure, it is the total mortgage indebtedness less the amount of any MI claim proceeds. For a short sale, it is the sum of the current UPB of the mortgage loan, interest (computed at the mortgage note rate) from the LPI date through the expected date of closing, and miscellaneous expenses, less any cash contributions from the borrower or property purchaser.
make whole payment
The amount that a party responsible for a breach of a selling representation or warranty or a servicing breach must pay Fannie Mae so that Fannie Mae does not incur a loss on the mortgage loan or the property.
management escalation process
An option available to a seller/servicer or other responsible party for challenging a demand for a servicing remedy after the conclusion of the impasse process.
mandatory delivery commitment
A portfolio mortgage loan commitment that generally requires the seller to deliver eligible mortgage loans equal to at least the minimum required delivery amount (which is an amount that will not be less than the original commitment amount by more than $10,000 or 2.5% of the original amount) by the expiration date of the commitment.
manufactured home
Any dwelling unit built on a permanent chassis and attached to a permanent foundation system. Other factory-built housing (not built on a permanent chassis), such as modular, prefabricated, panelized, or sectional housing, is not considered manufactured housing. The manufactured home must be built in compliance with the Federal Manufactured Home Construction and Safety Standards that were established June 15, 1976 (as amended and in force at the time the home is manufactured) and that appear in HUD regulations at 24 C.F.R. Part 3280. Compliance with these standards will be evidenced by the presence of a HUD Data Plate that is affixed in a permanent manner near the main electrical panel or in another readily accessible and visible location. The manufactured home must be a one-family dwelling that is legally classified as real property. The towing hitch, wheels, and axles must be removed and the dwelling must assume the characteristics of site-built housing.
margin
The amount that is added to an index value to create the mortgage interest rate for an ARM; an amount (expressed as a percentage) that is used in the calculation of the purchase price for an ASAP Plus transaction.
margin differential
The margin shortage that occurs when the net mortgage margin is less than Fannie Mae’s required margin.
mark-to-market loan-to-value (MTMLTV) ratio
The gross UPB of the mortgage loan, which must include any principal forbearance UPB from a prior mortgage loan modification, divided by the current value of the property that secures the mortgage loan.
market-rate option
A post-conversion disposition option that allows the seller to determine whether it wants to redeliver a repurchased convertible ARM loan that was in an MBS pool to Fannie Mae following its conversion to a fixed-rate mortgage loan or to retain the repurchased mortgage loan for its portfolio.
Master Agreement
A negotiated contract that enables sellers to submit multiple transactions—both standard and negotiated—under the terms of a single agreement. Terms are specifically negotiated with each seller.
master servicer
A Fannie Mae approved servicer that is contractually obligated to service one or more mortgage loans for Fannie Mae and has contracted with a subservicer under a subservicing arrangement.
MBS commitment
An MBS commitment evidences an agreement between Fannie Mae and a lender to buy and sell, respectively, mortgage loans for inclusion in an MBS pool.
MBS Express pool
An MBS pool for which the servicer remits unscheduled principal payments to Fannie Mae on the 4th business day of the month and scheduled P&I payments on the 18th calendar day (or the preceding business day if the 18th is not a business day).
MBS Express remittance cycle
A payment cycle used for scheduled/scheduled remittance types for MBS pools that has two different remittance dates—one for unscheduled principal payments and one for scheduled P&I payments.
MBS margin
One of the factors used to establish the pool accrual rate for an ARM MBS pool on each interest rate change date. For stated-structure ARM MBS pools, it is the difference between the lowest mortgage margin in the pool and the sum of the guaranty fee and the minimum servicing fee. For weighted-average ARM MBS pools, the MBS margin may be a fixed margin that the seller specifies or a weighted-average margin. A fixed MBS margin is attained by varying the servicing fee for individual mortgage loans to equalize the differences in their mortgage margins. A weighted-average MBS margin is attained by reducing the various mortgage margins by the applicable guaranty fee and a fixed servicing fee that the seller specifies, thus developing a different MBS margin for each mortgage loan.
MBS mortgage loans
A mortgage loan (or participation interest in a mortgage loan) that is part of an MBS pool.
MBS pool
All of the mortgage loans or participation interests in mortgage loans (delivered under one or more contracts) that will back an individual issuance of MBS.
MBS pool delivery
Group or groups of mortgage loans (or participation interests in mortgages) delivered by a seller for the purpose of creating a pool to back an MBS issuance. These deliveries are accepted in one or more pool transactions, rather than being accepted as individual mortgage loans (or participation interests) to be held in Fannie Mae’s portfolio. Deliveries under this program are, therefore, referred to as MBS pool deliveries.
MI Direct process
An MI claims process where Fannie Mae files the primary MI claims on all conventional first lien mortgage loans on which Fannie Mae bears the risk of loss and are insured under a master primary policy issued by certain participating mortgage insurers.
military indulgence
A relief provision that is extended by law (such as by the SCRA to members of the U.S. military or by any similar state law) to a borrower by reason of military service.
mortgage loan modification
The act of changing any of the terms of the mortgage by agreement between the borrower and the note holder.
modification and assumption agreement
A written agreement to change the interest rate when the due-on-sale (or due-on-transfer) provision of the mortgage is enforced because of a change of ownership. It also releases the previous borrower from personal liability under the mortgage loan.
modified special servicing option
A servicing option that was previously available for RD mortgage loans under which the servicer had limited exposure to losses because Fannie Mae would reimburse it for the portion of an allowable loss that RD did not pay.
monthly payment
The monthly payment of P&I collected by servicers. This may also include escrow items for T&I and is therefore also called the full monthly contractual payment.
monthly remittance
The total of the interest and principal distribution amounts that a servicer is obligated to remit to Fannie Mae on each remittance date. For scheduled/scheduled remittance types, this represents scheduled principal reductions and scheduled interest accruals, whether or not payments were collected from the borrowers. For scheduled/actual remittance types, this represents scheduled interest accruals (whether or not payments were collected from the borrowers) and actual principal collections.
mortgage loan
An individual secured loan that is sold to Fannie Mae as a portfolio mortgage loan or in a pool of mortgage loans underlying Fannie Mae-guaranteed MBS. The term includes a participation interest in a mortgage loan where context requires.
Mortgage Release (deed-in-lieu of foreclosure)
A transfer of title from a delinquent borrower to the servicer in satisfaction of the mortgage debt to avoid foreclosure; also called a voluntary conveyance.
Mortgage Selling and Servicing Contract (MSSC)
The contract that establishes the basic legal relationship between a seller/servicer and Fannie Mae.
multiple pool
An MBS pool that consists of pools of mortgage loans delivered by more than one seller; also called Fannie Majors.

N

net yield commitment
A commitment contract that does not include any amount for the servicing fee as part of its yield. (All of Fannie Mae’s commitments are net yield commitments.)

O

owner of record
The entity that appears in the public records as the owner of a mortgage; usually the mortgage originator, unless the mortgage is subsequently assigned to someone else and that assignment is recorded.
outsource vendor
A third party engaged by a servicer or subservicer to perform select servicing functions according to the terms of an outsource or vendor agreement.

P

pair-off
A process under which a lender that is unable to meet the terms of a mandatory delivery commitment either pays Fannie Mae a fee or, under certain circumstances for whole loans transactions, receives cash back from Fannie Mae, calculated against the unused portion of the commitment.
participation certificate
The instrument that evidences an undivided interest in mortgages and obligations secured thereby.
participation interest
An individual interest in a mortgage loan, as specified in the applicable participation certificate.
participation pool
The group of mortgage loans that back a participation certificate. Fannie Mae purchases only a percentage interest in each of the mortgage loans. That interest is the same percentage that is specified on the participation certificate.
participation pool mortgage loan
A mortgage loan that is part of a participation pool that Fannie Mae purchased for its portfolio.
pass-through rate
The rate at which interest is paid to Fannie Mae for a mortgage loan. For mortgage loans held in Fannie Mae’s portfolio, it is the lower of the required yield or the mortgage interest rate after deduction of a minimum servicing fee.
payment rate
The percentage rate used to calculate the monthly payment when the payment will not fully amortize the mortgage. It differs from the interest accrual rate.
pool
A collection of mortgage loans (or participation interests) delivered pursuant to one or more MBS commitments that secure an individual issuance of MBS.
pool accrual rate
The rate of interest that accrues to the security holder of a stated-structure ARM MBS pool. It is subject to change in accordance with adjustments to the index.
pool issue date
The first day of the month in which MBS are issued.
pool purchase contract
See MBS commitment definition.
pool transaction
Any MBS transaction between Fannie Mae and a seller in which Fannie Mae purchases a group of mortgage loans or participation interests from the seller for the sole purpose of backing all or part of an issuance of MBS.
Pooled from Portfolio (PFP)
A PFP mortgage loan is a mortgage loan that has been securitized into an MBS pool directly from Fannie Mae’s portfolio. Such mortgage loan was either sold to Fannie Mae as a whole loan mortgage loan or is an MBS mortgage loan that was reclassified into Fannie Mae’s portfolio prior to being re-pooled.
portfolio mortgage loan
A mortgage loan purchased by Fannie Mae to hold in its mortgage portfolio.
principal distribution amount
For a particular remittance date, Fannie Mae’s share of the aggregate principal portions of the monthly installments for mortgage loans in an MBS pool that became due from the second day of the preceding month to and including the first day of the remittance month (whether or not they were actually collected) and those unscheduled principal recoveries that were collected during the month preceding the month in which the remittance is made. This is the principal amount that will be drafted from the servicer’s custodial account.
project development
A condo, PUD, or co-op housing project.
property securing a mortgage loan
Consists of the land, all improvements erected on the land, including any replacements or additions erected after the origination of the mortgage loan, and all easements, appurtenances, and fixtures that are part of the property or the improvements.
purchase date
The date on which Fannie Mae disburses the purchase proceeds for a whole loan delivery; the date on which Fannie Mae purchases a pool or mortgage loan in an early funding transaction.
purchase price
The percentage of par that Fannie Mae applies to the UPB of a mortgage submitted as a whole loan delivery to determine the amount of the purchase proceeds; the amount that Fannie Mae will pay the lender on the purchase date for a pool or mortgage loan being purchased in an early funding transaction.

Q

Quality Right Party Contact (QRPC)
A uniform standard for communicating with the borrower, co-borrower, or trusted advisor about resolution of the mortgage loan delinquency.
quitclaim deed
An instrument of conveyance of real property that passes whatever title, claim, or interest that the grantor has in the property, but does not make any representations as to the validity of such title. A quitclaim deed is not a guarantee that the grantor has clear title to the property; rather it is a relinquishment of the grantor's rights, if any, in the property. The holder of a quitclaim deed receives only the interest owned by the person conveying the deed.

R

rapid payment method (RPM) remittance cycle
A payment cycle used for scheduled/scheduled remittance types for MBS pools that has an early remittance date (usually the 10th of the month, although earlier or later dates can be negotiated) for both scheduled and unscheduled payments.
reclassification
The movement of a delinquent special servicing option MBS mortgage loan that meets specified criteria from the MBS pool into Fannie Mae’s portfolio.
recognition agreement
An agreement on the part of a co-op corporation to recognize specific rights of sellers who finance share loans in the project (or those of the sellers’ successors and assigns).
recourse
The obligation of the seller to cover losses the buyer incurs as a result of a default on the note. Under a portfolio mortgage loan transaction, a seller that sells a mortgage loan to Fannie Mae under the “with recourse” servicing option assumes the entire risk of borrower default, while a seller that sells a mortgage loan under the “without recourse” servicing option transfers the risk of borrower default to Fannie Mae. (See regular servicing option and special servicing option for equivalent terms for MBS transactions.)
redemption period
The specified period in which a borrower can reclaim foreclosed property by making full payment of the mortgage debt, under a legally enforceable right of redemption in some states.
regular servicing option
A guaranty fee option for an MBS pool under which the seller assumes the entire risk of loss from a borrower default; a servicing option for RD-guaranteed mortgage loans under which the servicer is fully responsible for any losses not recovered from the RD. (See recourse for the equivalent term for a portfolio mortgage loan delivery.)
renovation escrow account
An account that is established at closing for a renovation or energy-related improvement mortgage loan. It includes the renovation costs, the contingency reserve, and any escrowed monthly payments (if applicable) or monies that the borrower provides from his or her own funds. These funds are then used to pay for completed repair and renovation work and, if applicable, to make the monthly payments that come due during the renovation period.
relative
The borrower’s spouse, child, or other dependent or any other individual who is related to the borrower by blood, marriage, adoption, or legal guardianship.
release of liability
A written agreement whereby Fannie Mae releases a borrower from personal liability under the mortgage loan because a second party (the property purchaser or transferee) has been credit qualified and agreed to assume liability of the mortgage loan.
remaining term
Original term less the number of payments that have been applied.
remittance cycle
A schedule for determining when funds must be remitted to Fannie Mae each month. Portfolio mortgage loans generally have only a single remittance cycle (regardless of the remittance type), but MBS mortgage loans have three different remittance cycles (standard, RPM, and MBS Express).
remittance date
The date on which the servicer’s remittances are due to Fannie Mae. There is no specific remittance date for actual/actual remittance types since the remittance is based on the amount of funds accumulated at any time. For scheduled/scheduled remittance types, the usual remittance date for the P&I distribution amounts is the 18th of the month (although the servicer may choose an earlier remittance date under either the RPM or MBS Express remittance cycles). For scheduled/actual remittance types, the remittance date is the 20th of the month.
remittance type
A way of determining the composition of the servicer’s required remittance to Fannie Mae. For portfolio mortgage loans, there are three types (actual/actual, scheduled/actual, and scheduled/scheduled).
remittance type code
A unique code that is used to identify monies related to individual drafts reported through the MortgageLinks CRS. There are a different series of codes for P&I remittances and special remittances.
rent loss insurance
Insurance that protects the landlord against loss of rent or rental value due to fire or other casualty that renders the leased premises unavailable for use and as a result of which the tenant is excused from paying rent.
REOgram
An automated notice that a property has been acquired by foreclosure or acceptance of a Mortgage Release (deed-in-lieu of foreclosure), which serves as an early warning system for potential property dispositions.
repayment plan
An arrangement made to repay delinquent installments or advances.
repurchase date
The date through which interest must be calculated when a seller/servicer is required to repurchase a mortgage loan or an acquired property from Fannie Mae; the date on which the seller redelivers mortgage loans funded in certain early funding transactions to Fannie Mae for portfolio mortgage loan purchase or for securitization under an As Soon As Pooled Sale transaction.
repurchase price
The percentage of par that the seller/servicer must apply to the unpaid balance or outstanding debt of a mortgage loan or acquired property that it has to repurchase from Fannie Mae; the sum of the purchase price and the price differential for an As Soon As Pooled Plus™ settlement.
required margin
Fannie Mae’s posted commitment margin for each ARM plan plus all applicable adjustments.
required yield
Fannie Mae’s posted commitment yield plus all applicable adjustments. This yield does not include a servicing fee.
rescission of MI
Notification by the mortgage insurer that it has made the determination to rescind coverage in connection with a specified mortgage loan due to a breach of one or more provisions of the applicable mortgage guaranty insurance policy.
residential home mortgage
A mortgage that covers a one- to four-unit dwelling that is used to provide living accommodations.
responsible party
A seller, servicer, or other entity that is responsible for the selling representations and warranties and/or for the servicing responsibilities or liabilities on a mortgage loan.
rule of 78s
A method used to calculate an interest rebate when an installment loan that had add-on interest is paid off (or refinanced) prior to its maturity date.

S

sale date
For post-delivery servicing transfers, the date on which the ownership of the servicing rights and the legal liability for the servicing of Fannie Mae mortgage loans transfer from one servicer to another.
scheduled/actual remittance type
A method of sending monthly payments to Fannie Mae requiring servicers to remit the scheduled interest due (whether or not it is collected from borrowers) and the actual principal payments that it collects from borrowers.
scheduled/scheduled remittance type
A method of sending monthly payments to Fannie Mae requiring servicers to remit the scheduled interest due and the scheduled principal due (whether or not payments are collected from borrowers).
security
An ownership interest in a pool of mortgage loans, which is evidenced by a book-entry account within the Federal Reserve’s book-entry system.
security balance
The balance for an MBS mortgage loan (or a participation interest in an MBS mortgage loan) that is determined by reducing Fannie Mae’s share of the issue date principal balance of the mortgage loan by its share of any principal distribution amounts included in subsequent monthly remittances; the balance for an MBS pool that represents the aggregate security balance of all the mortgage loans (or participation interests) in the pool as of any date, which is equal to the aggregate issue date principal balances of the mortgage loans (or participation interests) less any subsequent principal distribution amounts.
seller/servicer
The Servicing Guide uses the term “seller/servicer” to refer to a seller and/or servicer that may be any or all of the parties involved in the origination, sale, delivery, and/or servicing of any type of Fannie Mae mortgage loan.
servicer
A Fannie Mae approved servicer that is contractually obligated to service one or more mortgage loans for Fannie Mae. Also refers to a subservicer if there is a subservicing arrangement.
Servicer's Reconciliation Facility (SURF)
A loan activity reporting system designed to allow servicers to report and view loan-level portfolio data.
servicing alternative remedy
Remedies other than repurchase of the identified mortgage loan including, after foreclosure, the acquired property that compensates Fannie Mae for damages, expenses, and losses resulting from the identified servicing defect. The costs associated with calculating any servicing alternative could include, but are not limited to
servicing compensation
The income that the servicer receives for the collection of payments and management of operational procedures related to a mortgage loan. It includes a base servicing fee, plus late charges, fees charged for special services, yield differential adjustments or excess yield, and, sometimes, prepayment premiums.
servicing contract
Any of the agreements between the servicer and Fannie Mae relating to the servicing of MBS mortgage loans.
servicing correction
An action taken by the seller/servicer that demonstrates that the identified servicing defect either (1) did not, in fact, exist, or (2) has been corrected in the time frame specified by Fannie Mae, such that the servicing defect is no longer considered by Fannie Mae to be a servicing defect.
servicing defect
A loan-level deficiency based on a servicing violation resulting from a breach of a term contained in the Lender Contract in effect at the time of the servicing violation.
servicing remedy
An action to resolve a servicing defect elected by Fannie Mae per the Lender Contract which may be either a servicing alternative remedy or a repurchase.
servicing repurchase defect
A servicing defect attributable to a servicing violation for which a demand for a repurchase servicing remedy could be issued without first issuing a notice of servicing defect or a demand for a servicing alternative remedy. Servicing repurchase defects shall be limited to servicing defects that
servicing spread
The fixed percentage amount for each mortgage loan or participation interest in a weighted-average ARM MBS pool that consists of the guaranty fee and the servicing fee. It cannot be less than the sum of the minimum allowable servicing fee and the guaranty fee applicable to the pool, nor greater than the sum of the maximum allowable servicing fee and the guaranty fee.
servicing violation
A breach of any servicer requirement or obligation contained in the Lender Contract related to servicing functions including, but not limited to
short sale
A procedure wherein Fannie Mae agrees to the borrower’s selling of his or her property for an amount less than that which is owed to Fannie Mae in order to avoid a foreclosure.
single pool
An MBS pool that consists of mortgage loans or participation interests delivered by a single seller.
single-family mortgage loan
A mortgage loan secured by a property that contains one to four residential dwelling units.
special remittance
A remittance, which generally is of a nonrecurring nature for an individual mortgage loan, that relates to a mortgage loan that has been liquidated through a short sale or foreclosure sale or the acceptance of a Mortgage Release (deed-in-lieu of foreclosure). It also may relate to a mortgage loan that has been paid in full, a mortgage loan for which Fannie Mae has advanced funds to protect its security, or a mortgage loan still in Fannie Mae’s portfolio that requires a purchase adjustment.
special servicing option
A guaranty fee option for an MBS pool under which Fannie Mae assumes the entire risk of loss from a borrower default; a servicing option for RD-guaranteed mortgages under which Fannie Mae will bear all losses not recovered from the RD. (See recourse for an equivalent term for a whole loan delivery.)
standard remittance cycle
A payment cycle used for scheduled/scheduled remittance types for MBS pools that requires the scheduled and unscheduled payments to be remitted to Fannie Mae on the 18th calendar day of each month (or on the preceding business day if the 18th is not a business day).
step-rate mortgage loan
A mortgage loan where the initial modified interest rate set at the time of the mortgage loan modification is a below market interest rate that is fixed for a specified period of time, then increases until it reaches its determined market interest rate. Once the market interest rate is achieved it remains fixed for the remaining term of the mortgage loan.
subservicer
A Fannie Mae approved servicer that is contractually obligated to a master servicer to perform substantially all of the ongoing servicing activities for one or more mortgage loans for the master servicer.
subservicing arrangement
An arrangement wherein the master servicer of one or more Fannie Mae mortgage loans hires a subservicer to subservice substantially all of its servicing functions.
subservicing transfer
A transfer of the physical servicing of one or more Fannie Mae mortgage loans from a master servicer to a subservicer, from a subservicer to another subservicer, or from a subservicer back to the master servicer for substantially all of the Fannie Mae required servicing functions.
sum of the digits interest calculation
See rule of 78s.
supervised lender
A financial institution that is a member of the Federal Reserve System, or an institution whose accounts are insured by the FDIC or the NCUA.

T

take-out option
A post-conversion disposition option that requires the seller to redeliver as a portfolio mortgage loan a repurchased convertible ARM loan that was in an MBS pool following its conversion to a fixed-rate mortgage loan and to continue any recourse or credit enhancement that initially applied to the mortgage loan (unless Fannie Mae agrees that it is no longer needed).
third-party sale
A foreclosure sale at which the successful purchaser of the property is someone other than the mortgagee or the borrower or their representatives.
total or near-total loss
A loss that is greater than 80% of the coverage amount of the insurance policy.
transfer date
For post-delivery servicing transfers, the date on which the physical transfer of the servicing or subservicing responsibilities from the transferor servicer or subservicer, as the case may be, to the transferee servicer or subservicer occurs. It may not necessarily be the same date as the sale date identified in the servicer transfer agreement.
transfer of ownership
Any means by which the ownership of property changes hands. Fannie Mae considers the transfer of all or any part of the property or any interest in the property to be a transfer of ownership, including the purchase of a property “subject to” the mortgage, the assumption of the mortgage debt by the property purchaser, and any exchange of possession of the property under a land sales contract, grant deed, or any other land trust device. In cases in which an inter vivos revocable trust or a limited liability company (LLC) is the owner of the property, Fannie Mae also considers any transfer of a beneficial interest in the trust or a controlling interest in the LLC to be a transfer of ownership.
trial period plan
A three-month period prior to the modification effective date during which the borrower makes payments approximating an amount equal to the modified payment as a condition of the modification. If the borrower is current or less than 31 days delinquent, the trial period must be four months in length.
two- to four-unit property
A property that consists of a structure that provides living space (dwelling units) for two to four families, although ownership of the structure is evidenced by a single deed.

U

underwriting documents
All of the documentation used to support the lending decision for a mortgage—such as the loan application and other documents used to verify a borrower’s employment, income, deposits, and credit history.
underwriting performance review
An after-the-fact review and risk assessment for a sampling of the mortgage loans Fannie Mae purchases or securitizes to ensure that they satisfy Fannie Mae’s mortgage loan eligibility criteria and underwriting guidelines.
unit mortgage
A mortgage (or share loan) on an individual residential unit in a PUD, condo, or co-op project.

V

voluntary conveyance
See deed-in-lieu of foreclosure.

W

weighted-average pool accrual rate
The weighted average of the net mortgage interest rates of the mortgage loans in a weighted-average ARM MBS pool, which is the rate at which interest will accrue on the MBS.
weighted-average structure pooling
A method of creating an ARM MBS pool that results in interest accruals to the security holder at the weighted average of the accrual rates of the mortgage loans in the pool.
whole loan delivery
The submission of a whole mortgage or a participation pool mortgage to Fannie Mae for purchase as a portfolio mortgage. Fannie Mae pays the mortgage seller cash for its mortgage delivery, rather than swapping the mortgage for a MBS.

X

No Applicable Terms

Y

yield differential adjustment
An amount paid to the servicer of a portfolio first mortgage loan when the initial interest rate of a mortgage loan exceeds Fannie Mae’s required yield for the commitment under which the mortgage loan was purchased. For ARM loans, a yield differential adjustment occurs if there is excess “margin” rather than yield.

Z

No Applicable Terms