Servicing Guide

Published September 9, 2020

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For investor reporting, what are Fannie Mae's requirements for reporting on a single family mortgage loan after modification?

Loan activity reporting must continue on a delinquent loan that is being modified. If, in the final month of the trial period, the sum of unapplied trial period payments is equal to or greater than a full contractual payment on the underlying mortgage loan, and the mortgage loan modification is closed in the same month, the servicer must report the contractual payment before the post-modification balances can be reported. This will require two LARs and two reporting cycles to complete. 

The final pre-modification UPB and final pre-modification LPI values in Fannie Mae’s servicing solutions system must match the last reported UPB and LPI in Fannie Mae’s investor reporting system. If the values do not match this will cause an exception in Fannie Mae’s servicing solutions system and the case cannot close until this discrepancy is resolved.  

In the reporting period that Fannie Mae’s servicing solutions system successfully reports the final modification to Fannie Mae’s investor reporting system, the servicer must report a LAR.  The following table provides additional instructions based on what is processed in the current reporting month prior to acceptance of the Delinquency Modification.

If…

Then…

a LAR with LPI and UPB movement was processed in the current reporting month prior to the Delinquency Modification’s acceptance

the first LAR that Fannie Mae will accept will be in the next reporting month.

a LAR without LPI or UPB movement, or No LAR is processed, in the current reporting month prior to the Delinquency Modification’s acceptance

a LAR with after modification activity can be reported in the current reporting month.

any additional LARs are received after a LAR with LPI and UPB movement was processed in the current reporting month prior to the Delinquency Modification’s acceptance

the additional LARs will be deemed “Invalid” and be reflected as such in the Loan Activity Summary Report. A detailed list can be obtained from your Investor Reporting Analyst.

Note: This is applicable to Bankruptcy Cramdowns as well. 


The servicer must report the modification of any mortgage loan in the first delinquency status information it transmits to Fannie Mae after Fannie Mae approves the mortgage loan modification. Existing monthly LAR reporting requirements for Fannie Mae servicers apply for a mortgage loan that has been modified.

The following table provides additional instructions related to special reporting requirements for loan modifications that include a principal forbearance. 

If a mortgage loan modification includes…

Then the servicer must…

a principal forbearance

  • report the net UPB (full UPB minus the forbearance amount) in the “Actual UPB” field in the LAR for the reporting month that the mortgage loan modification becomes effective, and
  • report interest on the LAR based on the net UPB.

Note: The initial reduction in UPB caused by the principal forbearance must not be reported to Fannie Mae as a principal curtailment.

a principal forbearance resulting in a balloon payment due upon the borrower's sale of the property or payoff, or maturity of the mortgage loan

  • include the principal forbearance amount when reporting principal on the LAR, when reporting a payoff or repurchase of the mortgage loan, but
  • never compute interest on the principal forbearance amount, including at the time of liquidation.

Note: Attempting to report a payoff or repurchase without including the principal forbearance amount will generate an exception (hard reject) upon submission of the LAR.

a principal forbearance for which a principal curtailment is received

  • apply such principal curtailment to the interest-bearing UPB, if the curtailment is less than the interest-bearing UPB.
  • apply such principal curtailment in the following order if the curtailment is greater than or equal to the interest-bearing UPB:
  1. to the principal forbearance, if any; and
  2. to the interest-bearing UPB.

For more information see Investor Reporting Manual Chapter 4, Special Loan Handling

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