Servicing Guide

Published October 14, 2020

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SMDU™ UI User Guide 7.39 October 2020 (Evaluate for a Workout- How to Use SMDU to Evaluate for a Workout Option AFTER a Disaster-Related Forbearance)

How to Use SMDU to Evaluate for a Workout Option AFTER a Disaster-Related Forbearance. 65  

Evaluate for a Disaster Workout Option. 66

Evaluate for a CMOD when Borrower Eligible for EMOD

 

How to Use SMDU to Evaluate for a Workout Option AFTER a Disaster-Related Forbearance

When entering a disaster-related forbearance loan using the Evaluate for a Workout icon, you will need to provide the data fields listed in this section on the Prior Workout History, Hardship and Insurance & Escrow pages.  You do not need to provide income when evaluating for a disaster related evaluation. 

SMDU allows either FBO (Other Forbearance Plan) or FBS (Standard Forbearance Plan) to be reported as the “Prior Workout Type” on the Prior Workout History page when evaluating for disaster evaluations. 

SMDU will evaluate a mortgage loan where the property securing the mortgage loan, or the borrower’s place of employment, is in a Federal Emergency Management Administration (FEMA)-Declared Disaster Area eligible for Individual Assistance according to the Servicing Guide. The Extend Mod (EMOD) does not require a complete Borrower Response Package (BRP) or a property valuation, but does require the “Loan Remaining Term”, which is the remaining term of the loan at the time of evaluation.

  • Note: SMDU will derive the loan's pre-modification remaining term (in months), "Loan Remaining Term" as part of its evaluation of a loan for an EMOD and/or Cap and Extend Modification (CMOD) for Disaster Relief. Therefore, a servicer is no longer required to provide this number in the SMDU Request.  However, if a servicer does provide a value for "Loan Remaining Term" and that value is different than the value derived by SMDU, the following message will be returned in the SMDU Response:  “The value provided by the servicer for the Loan Remaining Term is not equal to the SMDU Derived value. SMDU has used its derived value of [Parametric Value] in the modification evaluation. (Message ID 5710).”
  •  
  • Note: The “Loan Remaining Term” is calculated from the current month’s due date to the loan’s maturity date, regardless of delinquency.  For example, if a loan is being reviewed by SMDU on 09/20/2018, then you would need to calculate the number of month’s starting from the loan’s 09/01/2018, due date until the loan’s maturity date.
  •  
  • If the Maturity Date equals 02/01/2037 you would calculate the “Loan Remaining Term” starting from 09/01/2018 (current month’s due date) until 02/01/2037, so there are 221 months remaining on this loan.  Even though a loan is delinquent the “Loan Remaining Term” is still from the current month’s due date until the loan’s maturity date.

Evaluate for a Disaster Workout Option

A. For a borrower to be evaluated for a disaster modification he/she must have been previously placed on a forbearance plan. This forbearance plan needs to be reported to SMDU as a Prior Workout Record and include the information noted in the table below.

Status Date

Status

Workout Type

N/A – will not affect the evaluation for disaster modification

Accepted by Borrower

Forbearance Plan (Standard)

OR

Forbearance Plan (Other/Non-Standard)

 

N/A – will not affect the evaluation for disaster modification

Provisional Payment Period

This date must be within 90 days of the current date

    •  

Note:   If the date is greater than 90 days of the current date and the workout activity type is permanent/ completed then SMDU will find the loan  ineligible for a disaster mod

Permanent/Completed Workout

B. After you have selected the “Evaluate for Workout” icon select the Prior Workout History link from the left hand navigation bar to report the Forbearance Plan.

. 71

C. The Prior Workout History page will open and you will need to select “+Add Prior Workout 

D. The “TO SUBMIT TO SMDU” grid will open and will need to be completed

1. Enter the “Status Date” by entering the date (MM/DD/YYYY) or selecting the date by clicking on the calendar icon

  • Note:  This date must be within 90 days of the current date.  If the date is greater than 90 days of the current date and the workout activity type is permanent/completed then SMDU will find the loan ineligible for a disaster modification.

2. For prior workout “Status” select either “Accepted by Borrower”, “Provisional Payment Period” or “Permanent/Completed Workout” from the drop-down box

3. For prior Workout Type” select either “Forbearance Plan (Standard)” or “Forbearance Plan (Other/Non-Standard)” from the drop-down box

4. For workout “Activity Type” select either “Active” or “Completed” from the drop-down box

E. Select the Hardship link from the left hand navigation bar

  1. Select “Disaster” as Hardship “Reason” from the drop-down box
  2. Enter hardship’s “Start Date” by entering the date (MM/DD/YYYY) or selecting the date by clicking on the calendar icon, required for all hardships
  3. Enter hardship’s “End Date” by entering the date (MM/DD/YYYY) or selecting the date by clicking on the calendar icon, required for Short Term/Temporary hardship durations
  4. Select the duration of the Hardship
  5. Is borrower hardship related to Mon-FEMA Declared Disaster?is the Non- FEMA Disaster Hardship Indicator and should be provided if the Hardship reason is disaster, but the property was not impacted by a FEMA declared disaster eligible for individual assistance

F. Select the Insurance & Escrow  link from the left hand navigation bar

  1. If applicable, enter the “Escrow Advances” amount, any amount based off projected escrow analysis already paid by servicer and any escrow advances servicer expects to pay during the trial period
  2. When a servicer provides the “Number of Months Future Escrow Shortage Payment Will Be Collected (1 to 60)” in the SMDU Request, SMDU will use that value in its evaluation of an EMOD to calculate the additional monthly escrow shortage created by the escrow advance amount. 
  • If a servicer does not provide the number of months in the SMDU Request, SMDU will use 60 months to calculate the additional monthly escrow shortage created by the Escrow Shortage for an EMOD.
  • If a servicer provides a value of zero (not null) or greater than 60, SMDU will return a validation error.
  • Regardless if a value is provided, the following message will be returned in the SMDU Response for an EMOD: “The value provided in Loan Escrow Advance Amount has been spread out over a [Parametric Value] month period. SMDU has included the amount of $[Parametric Value] in the Monthly Housing Expense Post-Workout Amount and Trial Period Payment Amount. (Message ID 6549).”
    • Note:  For the EMOD, Structuring Trial Result SMDU will take the loan “Escrow Advances”, divide it by the number provided in the “Number of Months Future Escrow Shortage Payment will be Collected (1 to 60)” and then add the resulting amount to the “Scheduled Trial Payment Amount”.

Example: Below is how SMDU will treat the Escrow Advances for an EMOD

In the EMOD example above, the $3,000 “Escrow Advances” is spread out over 60 months, which equals $50 per month. SMDU will add the $50 to the “Scheduled Trial Payment Amount”.

G. Except as outlined above follow the instructions outlined in the Evaluate for a Workout section to complete an SMDU disaster evaluation.

H. If the borrower is found Ineligible for an EMOD then SMDU will automatically evaluate the borrower for the next workout in the hierarchy, which is the CMOD for Disaster Relief followed by the Flex Disaster Modification.

Evaluate for a CMOD when Borrower Eligible for EMOD

A. Per LL-2017-09 (Reviewing for a Workout Option after a Disaster-Related Forbearance) a servicer may evaluate a borrower for the Fannie Mae CMOD for Disaster Relief when the borrower is Eligible for the EMOD and the servicer determines that the EMOD is not the appropriate workout as described in the LL-2017-09.   

B. The servicer must report the Eligible EMOD to SMDU as a Prior Workout Record and include the information noted in the table below.

Status  Date

  Status 

Workout Type 

Activity Type

Fail/Cancel Reason

Date the Workout was offered to the Borrower

Evaluated-Qualified Or

Offered to Borrower

Extend Modification 

Failed/Canceled/ Denied

Offer Not Accepted by Borrower/ Request Withdrawn

C.  After you have selected the Evaluate for Workout icon select the Prior Workout History link from the left hand navigation bar to report the eligible EMOD.

D. The Prior Workout History page will open and you will need to select “+Add Prior Workout 

  • NoteThe above shows that a disaster forbearance was provided to SMDU during the initial review for an EMOD.   When SMDU identifies a disaster forbearance has been reported, SMDU will proceed down the SMDU disaster hierarchy path. 

E.  The “TO SUBMIT TO SMDU” grid will open and will need to be completed

1. Enter the “Status Date” by entering the date (MM/DD/YYYY) or selecting the date by clicking on the calendar icon

2. For prior workout “Status” select either “Evaluated-Qualified” or “Offered to Borrower” from the drop-down box

3. For prior Workout Type” select “Extend Modification Disaster” from the drop-down box

4. For workout “Activity Type” select either “Failed/Cancelled/Denied” from the drop-down box

5. For workout “Fail/Cancel Reasonselect “Offer Not Accepted by Borrower/Request Withdrawn” from the drop-down box

F. Except as outlined above follow the instructions outlined in the Evaluate for a Workout section to complete an SMDU disaster evaluation.

G. If the borrower is found Ineligible for the CMOD then SMDU will automatically evaluate the borrower for the next workout in the hierarchy, which is the Flex Disaster Modification.

 

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