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Introduction to BU/BD and User Scenarios
Lenders may buy up or buy down the guaranty fee rate on loans in a Fannie Mae Mortgage-Backed Security (MBS) in exchange for a one-time payment from or to Fannie Mae. This job aid provides an overview of Buyup/Buydown (BU/BD) options and functionality available for lenders delivering MBS loans in the Loan Delivery application.
For detailed instructions on how to perform other tasks, see the Loan Delivery User Guide, eLearning tutorials, or other job aids. If you do not have access to Loan Delivery and require it, please contact your Technology Manager administrator.
Scenarios for Using the BU/BD Features in Loan Delivery
Scenario 1 – All GFee Data Imported – No Changes Needed in Loan Delivery
All Note Rate, Contract, GFee, and GFee after BU/BD information is imported directly into Loan Delivery via an imported XML file and you do not wish to change any of the imported information.
Assigning Contract and GFee Information
The following options are available to assign Contract and GFee information when not provided in an imported XML file:
NOTE: You must FIRST assign the Contract number and GFee information within your ULDD XML import file or manually BEFORE any BU/BD options are available in Loan Delivery.
Scenario 2a – “Update All” loans with the Same Contract (same GFee per Contract)
The "Update All" feature allows you to assign the SAME Contract number and GFee information for all the loans within the pool.
NOTE: If all loans have the same GFee after BU/BD, you can also assign during this step.
Scenario 2b – Co-mingling Loans with the Same Contract, (different GFees per Contract)
To co-mingle GFees within the same contract, you first need to use “Update All” to assign the contract number to all loans within the pool. Then using the “Update Loan” feature you can select loan(s) and assign the GFee. This process will be repeated until all loans have been assigned a GFee.
Scenario 2c – Co-mingling Loans with Different Contracts (same GFee per Contract)
To co-mingle contracts (with same GFee per contract) use the “Update Loan” feature to select loan(s) and assign Contract and GFee. This process will be repeated until all loans have been assigned for both Contract and GFee.
Assigning GFee after BU/BD Options
The following options are available after Contract and GFee per Contract have been assigned to loans either through an imported XML file or through Update All/Update Loan features in Loan Delivery.
NOTE: You must FIRST assign the Contract number and GFee information within your ULDD XML import file or manually BEFORE any BU/BD options are available within Loan Delivery.
Scenario 3a – “Update All” loans with Same GFee after BUBD
Contract and GFee information has been assigned and now you want to assign the SAME GFee after BU/BD to all loans within the pool.
Scenario 3b – “Automatic Fit” – Fixed Rate Amortization Pool Only
Contract and GFee information has been assigned for a fixed-rate amortization pool only and you now want the system to automatically calculate the amount of BU/BD to fit the servicing fee.
Scenario 3c – “Customized Fit” – Any Type Amortization Pool
Contract and GFee information has been assigned for a pool with any type of amortization and now you want to specify the GFee after BU/BD by specific Note Rate.
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