Evaluate for Final
The following process should be used to convert an SMDU decisioned trial, which has been completed by the borrower, to a final modification.
- Note: The difference between the Evaluate for Final and Evaluate for First-Time Final functionalities:
- The Evaluate for Final functionality is used when a servicer wants to use the SMDU structuring trial evaluation response to evaluate for final terms. This is also called a dependent final because it is reliant on there being a SMDU structuring trial evaluation.
- The Evaluate for First-Time Final is used when a servicer is NOT using an SMDU structuring trial evaluation. This is a standalone evaluation and the servicer will need to provide all the required data for SMDU to evaluate for structuring final terms.
SMDU will evaluate the structuring-final request using the set of policy eligibility rules that were in effect during the historical trial evaluation. SMDU will use the servicer-provided unique identifier from the prior approved trial to determine which trial evaluation to use when processing a final structuring request. If a unique identifier from a previous approved trial is not provided by the servicer on the final structuring request, SMDU will use the set of SMDU policy eligibility rules from the most recent trial structuring approval.
A. Search for the loan by using the Fannie Mae 10-digit loan number.
B. If the loan search is successful you will be brought to the Loan Landing screen, which features the main actions banner and is comprised of a variety of sections, including the “Recent SMDU Evaluation History”.
C. To have SMDU evaluate a loan for a structuring trial select the Evaluate for Final icon.
D. The Evaluate for Final screen opens. For your convenience this page contains the data elements that often change after the trial evaluation and should be updated for the final evaluation. However, it is important to also update any other data elements that reside within the left-hand navigation.
- Note: Servicer is responsible for all data submitted through SMDU to Fannie Mae, so any data that changed from the original trial evaluation MUST be reviewed and updated prior to submitting to SMDU for the Final Structuring review.
- Note: Data elements that are already populated with data reflect the information that was submitted to SMDU for the trial evaluation. Please update the information that has changed since the trial evaluation.
- Verify and, if applicable, update the loan “Workout Effective Date” (aka Loan Modification Effective Date), to update it you can either manually enter the date (MM/DD/YYYY) or click on the calendar icon to select the date
- Enter the monthly “Trial Plan Payment Amount”
- Note: The Trial Plan Payment Amount is displayed in the Overview of Proposed Terms at the top of the page.
- Enter the “Total Remaining Trial Payment Amounts Expected to be Collected” from the borrower prior to the end of the trial, if all the required trial payments were received and recorded in your system of record then a zero MUST be entered in this field
- Note: If you are submitting loan to SMDU for the Final Structuring request PRIOR TO receipt of the final trial payment, then include the amount expected to be collected for the payment(s) not yet recorded in your system of record. Do not record this expected to be collected payment(s) amount in any other field and do not include any amount from this trial payment when calculating the “Actual Interest Applied During Trial.”
- Enter the “Actual Interest Applied During Trial”, which is the interest portion of the trial payments that were applied during the trial period according to your system of record
- Note: If you expect to receive an additional trial payment, but it has not yet been received, DO NOT include the interest for that trial payment.
- “Pre-Modification Unpaid Principal Balance (At Case Creation)” is the loan’s last unpaid principal balance, excluding forbearance, prior to receipt of the first trial payment. If the amount displayed does not match what was on your system of record at the time of case creation then you will need to update
- Note: The amount of existing forbearance should have been provided with the submission to SMDU for the trial evaluation. If this amount was not provided in the trial evaluation you must enter the “Existing Forbearance” field which resides on the Delinquency & Foreclosure page.
- Update the “Last Paid Installment Date” to match what is on your system of record AFTER RECEIVED trial payments have been applied, to update it you can either manually enter the date (MM/DD/YYYY) or click on the calendar icon to select the date
- Note: This is the date according to your servicing system at the time of the final evaluation. This date is based on the receipt of the collected trial payment(s) and should represent the last paid installment date after the applicable trial payments have been applied in your system of record.
- Note: If you are submitting to SMDU for the Final Structuring request PRIOR TO receipt of the final trial payment, then do not include any amount from this uncollected trial payment when determining the current “Last Paid Installment Date.” Remember you will need to include the uncollected trial payment(s) in the “Total Remaining Trial Payment Amounts Expected to be Collected” field. SMDU will utilize this amount in its calculations based on the last paid installment date you provide from your system of record (date after all trial payments received have been applied). SMDU will also utilize data you provide in the Pre-Workout Amortization Table which resides on the Loan & Origination page in its calculation of the last paid installment date before capitalization.
- Review the loan’s “Delinquent Interest” for capitalization per program criteria and update, if applicable, this is the amount of delinquent interest from the loan’s last paid installment date before capitalization until one month prior to the loan’s “Workout Effective Date”.
- Note: You must use the interest from the loan’s amortization table versus using the “payoff” method, if you use the “payoff’ method your delinquent interest calculation will most likely never match what SMDU calculates.
- Review the loan’s “Other Advances” and update, if applicable, this amount includes all “other” items that should be capitalized (e.g., property preservation, notary fees, etc.)
- Note: “Other Advances” does not include Delinquent Interest, Attorney Fees/Cost or Escrow Advances, each of these amounts, if applicable, are captured in their own respective standalone data fields and are included in the SMDU capitalization calculation.
- Review the loan’s “Attorney Fees/Costs” for capitalization per program criteria and update this amount, if applicable
- Review the loan’s “Suspense Balance” and update, if applicable, this is the amount of a partial mortgage payment(s) made by the borrower that the servicer is holding, but has not yet applied to the loan
- Review the loan’s “Escrow Advances” for capitalization per program criteria and update, if applicable, this is any amount already paid by servicer and is based on the final escrow analysis
- Review the loan’s “Future Escrow Shortage Monthly Payment” amount and update, if applicable, this is the monthly payment amount associated with the repayment of escrow account shortages that were identified during the final escrow analysis for the loan modification
E. From the left-hand navigation bar select the Loan & Origination link, you will need to make updates on this screen before submitting to SMDU for a final review. “Last Reported UPB to Fannie Mae” is the loan’s last unpaid principal balance reported to Fannie Mae via Investor Reporting (SURF), this will be automatically updated from the structuring trial evaluation
- “Last Reported UPB to Fannie Mae” is the loan’s last unpaid principal balance reported to Fannie Mae via Investor Reporting (SURF)
- Enter the “Loan Unpaid Principal Balance”, the current principal balance from your servicing system at the time of final evaluation, this does NOT include any existing forbearance amount
- Note: You will need to enter the loan’s current unpaid principal balance after applicable trial payments have been applied in your servicing system.
- Note: Remember you can request an SMDU Structuring Final evaluation after receipt and application of the first trial payment, you do not have to wait until all payments have been received.
- If applicable, enter the “Existing Forbearance” amount associated with a prior workout
- Note: This amount should have been entered during the structuring trial evaluation; however, if it was not provided or there was an input error then you will need to update prior to requesting the SMDU Structuring Final evaluation.
- “Reported Last Paid Installment Date” is the loan’s last paid installment date reported to Fannie Mae via Investor Reporting (SURF)
- Enter the loan’s “Last Paid Installment Date” by entering the date (MM/DD/YYYY) or selecting the date by clicking on the calendar icon, this date comes from your servicing system at the time of evaluation
- Note: Enter the date the loan advanced to after applicable trial payments were applied in your servicing solution system.
- If SMDU provides an “MBS Pool Identifier” then you know the loan is in a pool and will need to be removed prior to closing out the case
- Note: Servicers wishing to modify a loan should make a manual reclass request if the loan has not been scheduled for automatic reclassification.
To reclassify the MBS loan in the current month, you must make the manual reclass request between the 16th calendar day of the previous month and the 15th calendar day of the current month. The MBS loan will be moved from scheduled/scheduled to actual/actual effective the 1st business day of the following month.
Manual reclass requests must be completed in HSSN. You can access the HSSN Manual Reclass Request job aid by clicking on the following URL:
- Review the loan’s “Post-Workout Monthly Mortgage Insurance” amount and update, if applicable. This is the monthly payment for private mortgage insurance based on your final escrow analysis
- Review the loan’s post-workout “Monthly Real Estate Taxes” amount and update, if applicable. This amount is based on your final escrow analysis
- Review the loan’s post-workout “Monthly Association Dues/Fees” amount and update, if applicable. This amount is based on your final escrow analysis
- Review the loan’s post-workout “Monthly Hazard Insurance” amount and update, if applicable. This amount is based on your final escrow analysis
- Review the loan’s post-workout “Monthly Flood Insurance” and update, if applicable. This amount is based on the projected or final escrow analysis
- Note: A projected escrow analysis should have been used during the SMDU Structuring Trial evaluation. However, when submitting for an SMDU Structuring Final evaluation a final escrow analysis must be completed.
- SMDU will automatically calculate the "Scheduled Payment Due Date" when item "5" is entered on this page, the "Last Paid Installment Date"
- Enter in the "Scheduled Monthly Principal Payment" amount based off the loan's current amortization table
- Note: When submitting an Interest Only loan you will need to enter zero into each of the four Scheduled Monthly Principal Payment fields.
- Enter in the "Scheduled Monthly Interest Payment" amount based off the loan's current amortization table
- Enter in the "Scheduled Total Monthly Payment" amount based off the loan's total contractual payment
- Note: The "Scheduled Total Monthly Payment" amount is the total contractual payment the borrower pays at the time evaluation, so if the borrower doesn't pay escrow pre-workout then escrow is not included in the contractual payment. If, however, the borrower pays escrow pre-workout then the escrow needs to be included in the contractual payment. This is the total contractual amount the borrower must pay in order to advance the Last Paid Installment date by one month
- If applicable, update the “Servicer Contact Name”, the person responsible for working with Fannie Mae on modification
- If applicable, update the “Servicer Contact Email Address”, the person responsible for working with Fannie Mae on modification
- If applicable, update the “Servicer Contact Phone Number”
- If applicable, update the “Servicer Contact Phone Number Extension”
F. Submit the Evaluate for Final Request: Once you have entered and reviewed all the data and are ready to submit the case click the Submit for Final Evaluation button. Before doing so, be sure that your data is correct, as the SMDU decision is based on that data. SMDU will evaluate this information against the Fannie Mae workout hierarchy. SMDU ensures compliance with Fannie Mae workout evaluation policies through accurate and consistent workout decisioning.
- Note: The “SMDU Results Bar” will initially show the trial results, after you submit for final it will refresh.
G. SMDU evaluates the loan in real-time and returns the results in the “SMDU Results Bar”.
- A Green Checkmark indicates an Eligible workout
- A Red X repress indicates an Ineligible workout
- A Blue Question Mark indicates a Conditionally Qualified workout
H. In the example below, SMDU found the borrower Eligible for a Fannie Mae FLEX Modification; Ineligible for CMOD and Conditionally Qualified for DIL and PFS.
1. To view the reason(s) why SMDU determined a workout was Ineligible, click on the Red X above the applicable workout.
In this example, the CMOD did not qualify because the loan cannot be more than six months delinquent.
However, if the unresolved hardship was the only failed message then you will need to select the Hardship link from the left hand navigation bar, add the “Hardship End Date” and reselect the Submit for Final Evaluation button. SMDU will re-evaluate the loan and provide you with an update “SMDU Results Bar”.
2. To view the reason(s) why SMDU determined a workout was Conditionally Qualified, click on the Blue Question Mark above the applicable workout.
In this example, the DIL did not complete its review because the property disposition indicated that the borrower wanted to retain the subject property.
3. To view the final structuring results for the Eligible workout click on the Green Checkmark above the applicable workout. The below screenshot shows a comprehensive view of the SMDU evaluation. After the comprehensive view, each section will be broken down to provide additional information on the information provided by SMDU.
- Note: If you receive an ineligible at final but the trial was approved please contact Fannie Mae’s Servicing Solution Center (SSC) for guidance on submitting case through the SMDU UI Create Manaul Subission functionality for review by Fannie Mae’s Home Retention Solutions (HRS).
- Note: Messages returned by SMDU are broken down into five separate categories:
· Eligibility: Pertain to the assessment and loss mitigation recommendation of the loan
· Validation: Designed to help you detect missing or inconsistent data
· Observation: Identifies the version of SMDU that was used to analyze the loan, as well as other message confirmations
· Servicer Guidance: Designed to assist you in discussions with the borrower about the benefits associated with the evaluated workout
· Documentation: Identifies the processing steps you must complete to comply with SMDU’s requirements
I. Overview of some of the SMDU Final Structuring response details
1. SMDU Workout Details
- “Workout Effective Date” is calculated by SMDU as the modification’s first payment due date post trial period
- “Principal Forbearance” calculated by SMDU is the total principal deferred through loss mitigation
- “Capitalized Amount” is calculated by SMDU final by adding the delinquent interest plus advances less borrower’s contribution
- “Delinquent Interest” is the amount of delinquent interest from the loan’s last paid installment date before capitalization until one month prior to the loan’s “Workout Effective Date”
- “Borrower Contribution to Delinquent Interest” is the amount contributed by Borrower/MI/Hazard Insurance to write down delinquent interest. SMDU will first apply the Borrower/MI/Hazard Insurance to delinquent interest and then to advances.
- “Borrower Contribution to Advances” is the amount contributed by Borrower/MI/Hazard Insurance to write down advances. SMDU will first apply the Borrower/MI/Hazard Insurance to delinquent interest and then to advances.
- “Unapplied Suspense Funds Balance” is the amount expected to be carried over after the workout to avoid negative capitalization
2. SMDU Evaluation Summary
a. SMDU will advance the current “Last Paid Installment Date” by the total number of contractual payments that can be applied during from any unapplied funds in order to derive the “Last Paid Installment Date Before Capitalization”
Note: Prior to closing you will want to ensure your Investor Reporting’s (SURF) last paid installment date matches the “Last Paid Installment Date Before Capitalization”. If these dates do not match you will not be able to close out the loan.
b. The “SMDU Request Time” is the servicer’s evaluation date
3. Loan Changes
a. “Remaining Term Post-Workout” is the new term for the loan as of workout effective date (aka “Workout Effective Date”).
b. “Loan Unpaid Principal Balance Pre-Workout” is the loan’s current unpaid principal balance after trial payments were applied but before capitalization
Note: Prior to closing you will want to ensure your Investor Reporting’s (SURF) unpaid principal balance matches the “Loan Unpaid Principal Balance Pre-Workout”. If these amounts do not match you will not be able to close out the loan.
c. “Loan Unpaid Principal Balance Post-Workout” is the loan’s pre-workout unpaid principal balance plus the SMDU calculated capitalization less the SMDU calculated forbearance
d. “Monthly Principal & Interest Post-Workout” is the calculated monthly principal and interest payment post workout
Note: SMDU will allow a modest increase in a borrower’s principal and interest (P&I) payment on a dependent final for these Fannie Mae Modifications (Mod): Flex Mod, Cap and Extend Mod, Cap and Extend Mod for Disaster Relief, and Fannie Mae Flex Mod for Disaster Relief. A dependent final means that the trial was also decisioned by SMDU. Consequently, when SMDU determines a loan is eligible that has an increase over the pre-modification P&I payment SMDU will return the following message in the SMDU Response: “The approved Final Structuring terms includes a modest increase in the Principal and Interest Payment Post-Workout Amount. Servicer may proceed with the eligible terms from SMDU notwithstanding the increase in principal and interest payment. (Message ID 5572).”
This expanded eligibility is available only at final structuring for servicers who use SMDU for both the trial and final structuring evaluations. A P&I increase will not be allowed on a SMDU trial structuring evaluation or a first-time final structuring evaluation.
e. “Escrow Payment Amount Post-Workout” is the calculated post-workout monthly payments provided on the Loan & Origination screen (“Monthly Real Estate Taxes”, “Monthly Association Dues/Fee”, “Monthly Hazard Insurance” and “Monthly Flood Insurance”)
Note: “Post-Workout Monthly Mortgage Insurance” from the Loan & Origination screen and “Future Escrow Shortage Monthly Payment” from the Insurance & Escrow screen are not included in the “Escrow Payment Amount Post-Workout” and should be added.