Servicing Guide

Published September 9, 2020

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SMDU™ UI User Guide 7.38 September 2020 (Create a Short Sale Case Without Using a SMDU Evaluation of Short Sale Eligibility)

Create a Short Sale Case Without Using a SMDU Evaluation of Short Sale Eligibility 

This section provides instruction on how to create a Short Sale case for a loan in which:

  • SMDU was not used to evaluate borrower eligibility for a Short Sale; or
  • SMDU was used to evaluate the borrower eligibility for a Short Sale,  but a SMDU evaluation will not be used to create the case

Things to know before getting started

  • For a Short Sale case Fannie Mae will continue to email the decision and applicable details to the servicer contact provided in the case creation details.
  • To view the case details of a successfully created Short Sale case you must do so via HSSN.
    • NoteThe ability to view case details via the SMDU UI will be implemented in a future SMDU UI release.
  • If an active case exists then you will not be able to create a new case in HSSN/DARTS until the current case has been completed or cancelled.
    • NoteIf a case exists then the Create Short Sale icon will be grayed out and non-accessible.

​​​​​

A. Enter 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. 

C. Review the “Recent SMDU Evaluation History” section. This section helps you determine if the loan has been evaluated by SMDU.

 Note: Click on the “View” link to see the SMDU response bar (see example below).

Note: If the SMDU short sale decision is "Conditionally Qualified" results shows a blue question mark ) as illustrated in the screen shot below.   Click on the blue question mark to determine what data may need to be updated and then resubmit the loan to SMDU for another evaluation. To make updates to the data you will need to go to the “Evaluate for a Workout” section of the user guide.

Note: Generally, if you have an approved modification and the short sale (PFS) and Mortgage Release (DIL) results show as “Conditionally Qualified” as in the example above, then you may want to select the Property link from the left-hand navigation bar and change the “Intended Property Usage” from “Occupy as Primary Residence” to “Sell or Do Not Retain”. If this is the case then your short sale (PFS) and Mortgage Release (DIL) will move from “Conditionally Qualified” to “Eligible”, as in the example below.

​​​​​​

    • Click on the green checkmark above PFS to view the SMDU Trial Structuring Results calculated for an eligible PFS (short sale). Below the SMDU calculated results are passed messages, which are not included in screenshot.

Note: If the SMDU short sale decision is “Conditionally Qualified” and:

 

You are not using a SMDU evaluation to create a short sale because the borrower is Conditionally Qualified for  a  short sale (results shows a blue question mark (   ) as illustrated in the screen shot below. Click on the blue question mark to determine what data may need to be updated and then resubmit the loan to SMDU for another evaluation. To make updates to the data you will need to go to the “Evaluate for Workout” section of the user guide.

 

If after a resubmission to SMDU the borrower is Eligible for a short sale, refer to the “Create a Short Sale Case Using a SMDU Short Sale Eligibility” section for additional  instructions.

D. To create a case for short sale select the Create Short Sale icon.

E. The Create Short Sale screen opens up. You are responsible for completing and/or updating all applicable data.

  • Note: If a loan has been previously evaluated by SMDU, but you do not want to create the case using the SMDU Evaluation you must first complete the action below.                   
      • When a loan has been evaluated by SMDU for a workout option the “Request Information” section will be pre-populated with a SMDU Unique Identifier for the last SMDU Evaluation.  
      • To proceed with creating a short sale case without using this SMDU Evaluation you must select “No” from the drop-down box to answer the question, “Do you want to create a Short Sale Case using a SMDU decisioned result?” (refer to the screen shot below). 

  • When “No” is selected the Short Sale Case creation page may still be pre-populated with the data from the latest SMDU evaluation.   Therefore, it is important you review that data and make any applicable updates prior to submitting the case.

Note: You can also hover your cursor over the name of the respective data field to read the definition.

 

  1. Loan Details:  Enter or update the “Loan Unpaid Principal Balance”, the current principal balance from your servicing system at the time of case creation, this does NOT include any existing forbearance amount
  2. Loan Details:  Enter or update the “Last Paid Installment”, 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 case creation
  3. Loan Details:  Enter or update the loan’s “Last Paid Installment Date Before Capitalization” by entering the date (MM/DD/YYYY) or selecting the date by clicking on the calendar icon from, this date comes from your servicing system at the time of evaluation and it is the due date of the last paid contractual payment
  4. Loan Details:  Enter or update the current contractual "Interest Rate"
  • Note:    Enter the current interest rate on your servicing system, this should be the current contractual interest rate based on the date of submission, not based on the last paid installment date.
  1. Loan Details:  Enter or update the current scheduled “Monthly Principal & Interest” payment amount
  2. Loan Details:  Enter or update the scheduled “Remaining Term” in months from the date of submission regardless of any delinquency (calculate how many months are remaining from the evaluation month to the loan’s maturity date, do not calculate from the last paid installment date)
  3. Property:  Enter or update the complete physical “Property Address” (should match what was previously reported to Fannie Mae in SURF)
  4. Property:  Enter or update the physical “Property Address (Line 2)” (should match what was previously reported to Fannie Mae in SURF)
  5. Property:  Enter or update the “Property City” (should match what was previously reported to Fannie Mae in SURF)
  6. Property:Property State” is provided, if not correct then investor reporting (SURF) needs to be updated before you submit the case
  7. Property:  Enter or update the five digit “Property Zip Code” (should match what was previously reported to Fannie Mae in SURF)
  8. Property:  Enter or update the “Property Number of Units” from drop-down box
  9. Property:  Enter or update the “Current Property Usage” from drop-down box
  10. Property:  Enter or update the “Property Repair Cost” required to bring the property to a good and habitable condition 
      • Note:   This amount must be determined by an internal property inspection that was conducted within the last 90 days.
  11. Property:  Select or update answer by selecting “Yes” or “No” to indicate whether there are any known structural or environmental problems with subject property
  12. Property:  Select or update the current “Property Occupancy Status” from drop-down box
  13. Property:  Select or update the “Intended Property Usage” from drop-down box
  14. Property Valuation:  Enter “Property Value at Origination
  15. Property Valuation: Enter the “Property “As Is” Value” determined by the valuation method used (e.g. BPO)
  16. Property Valuation:  Enter the “Property Valuation Type” from the drop-down box 
  17. Property Valuation:  Enter the “Property Valuation Date” by entering the date (MM/DD/YYYY) or selecting the date by clicking on the calendar icon
      • Note:   If the property valuation data is greater than 90 days then you will need to get an updated BPO
      • Note:  SMDU may pull in the Automated Valuation Model (AVM) “Property “As Is” Value”, “Property Valuation Type” and “Property Valuation Date”.  When this happens override this information with details from the BPO and/or Appraisal.
      • Note:  The property valuation data provided during a loan modification evaluation is usually from an AVM, remember short sales reviews might require a different type of evaluation. 
  18. Property Valuation:  Enter the “LMV As Repaired Value Amount”, this amount is usually included on the BPO
  19. Foreclosure:  If applicable, enter the “Foreclosure Attorney Contact Name
  20. Foreclosure:  If applicable, enter the “Projected Foreclosure Sale Date” by entering the date (MM/DD/YYYY) or selecting the date by clicking on the calendar icon, projected or actual date property went/goes to foreclosure sale at public auction
  21. Foreclosure:  Select “Estimated” or “Scheduled” from the drop-down box to describe the “Foreclosure Sale Date Type
  22. Servicer Recommendation:  Enter the “Servicer Evaluation Dateby entering the date (MM/DD/YYYY) or selecting the date by clicking on the calendar icon, this is the date you evaluated the loan for a short sale
  23. Servicer Recommendation:  Select “Yes” or “No” to indicate whether servicer recommends approving the short sale
  24. Servicer Recommendation:  Enter your justification and/or comments supporting your recommendation in Servicer Workout Comments
  25. Servicer Recommendation:  Enter any additional comments supporting your recommendation in Servicer General Comments
  26. Borrower Contribution:  Enter the “Borrower Contribution”, which is the cash contribution the borrower will contribute to cure outstanding balance
  27. Delinquency/Fees and Costs:  Enter the “Delinquent Interest
  28. Delinquency/Fees and Costs:  Enter the “Delinquent Interest Through Submission Date Amount”, which is a calculation of the delinquent interest based on the loan’s current LPI date through the last day of the preceding month 
  • Note:  For example, if the reported last paid installment date was May 1, 2017 and the evaluation date is November 1, 2018, then the “Delinquent Interest Through Submission Date Amount” will be the interest amount from May 1, 2017 until October 31, 2018.  This should not confuse this with how actual “Delinquent Interest” is calculated for capitalization for a modification.
  1. Delinquency/Fees and Costs:  If applicable, enter any incurred “Attorney Fees/Costs
  2. Delinquency/Fees and Costs:  If applicable, enter any incurred “Allowable Modification Fees” 
  3. Escrow/Hazard Insurance: If applicable, enter any incurred “Escrow Advances
  4. Escrow/Hazard Insurance:  Enter the current “Escrow Payment” collected as part of regular monthly mortgage payment to cover, on behalf of the mortgagee, periodic payments of property taxes and hazard insurance
  • Note:  Private mortgage insurance payments and escrow shortage amounts should be excluded from the total “Escrow Payment” amount.  Is this a correct statement, it is excluded on the modification side, should it be excluded or included on the PFS side?
  1. Escrow/Hazard Insurance:  If applicable, enter the “Estimated Hazard Insurance Proceeds”, estimated hazard or flood insurance proceeds (if no proceeds you MUST enter a $0.00)
  2. Escrow/Hazard Insurance:  If applicable, enter the “Escrow Balance” Report escrow shortages as a negative number.
  3. Servicer Contact Information: Enter or update the "Servicer Contact Name", the person responsible for working with Fannie Mae on modification
  4. Servicer Contact Information: Enter or update the "Servicer Contact Email Address", the person responsible for working with Fannie Mae on modification
  5. Servicer Contact Information: Enter or update the "Servicer Contact Phone Number"
  6. Servicer Contact Information: Enter or update the "Servicer Contact Phone Number Extension"
  7. Mortgage Insurance:  If applicable, select the “Mortgage Insurance Company Name” from the drop-down box
  8. Mortgage Insurance:  If applicable, enter your “Contact at Mortgage Insurance
  9. Mortgage Insurance:  If applicable, enter your “Mortgage Insurance Contact Phone Number
  10. Mortgage Insurance:  If applicable, enter the “Mortgage Insurance Claim Amount”, estimated mortgage insurance amount to be paid at the time of workout
  11. Mortgage Insurance:  If applicable, enter the “Mortgage Insurance Coverage Percentage
  12. Mortgage Insurance:  If applicable, enter the “Mortgage Insurance Certificate Number
  13. Hardship:  If applicable, select or update the hardship “Reason” from drop-down box
  • Note:  You are responsible for ensuring that the hardship reason(s) reported to Fannie Mae is consistent with the hardship reason(s) contributing to the borrower’s need for loss mitigation assistance. You should report all hardships documented in the borrower’s Mortgage Assistance Application Form 710.  Additionally, you may report any other contributory hardships based on documented conversations or other documentation provided by the borrower.
  1. Hardship:  If “Disaster” is the hardship reason, you must enter the FEMA “Disaster Name
  2. Hardship: If applicable, enter “Hardship Reason Comments” you want to communicate to Fannie Mae
  3. Borrower Details: Select “Yes” or “No” to indicate if the borrower is eligible for streamlined documentation
  4. Borrower Details: Total Monthly Income” is a locked field
  5. Borrower Details:  Enter the borrower(s)’ gross “Total Monthly Income
  6. Borrower Details:  Enter the borrower(s)’ “Total Monthly Expenses (Pre-Workout)
  7. Borrower Details:  Enter Borrower One’s “First Name”
  8. Borrower Details:  Enter Borrower One’s “Last Name”
  9. Borrower Details:  Enter Borrower One’s “Representative Credit Score
  • Note:               SMDU will only allow a credit score value between 300 and 900.
  1. Borrower Details:  Update or select “Yes” or “No” to indicate if Borrower One has ever filed for bankruptcy
  2. Sale Details:  Enter the “Property List Start Date
  3. Sale Details:  Enter the “Gross Sales Price”, the projected or actual sales price of the property in the sales contact
  4. Sale Details:  Enter the “Full Name of Buyer” buying the property
  5. Sale Details:  Enter the gross “Purchase Offer Amount” received by servicer for subject property
  6. Sale Details:  Enter the “Purchase Offer Received Date”, by entering the date (MM/DD/YYYY) or selecting the date by clicking on the calendar icon
  7. Sale Details:  Enter the “Purchase Offer Closing Date” referenced in the purchase offer received by servicer, by entering the date (MM/DD/YYYY) or selecting the date by clicking on the calendar icon
  8. Sale Details:  Enter the “Net Sales Proceeds Amount” from purchase offer
  9. Closing Costs and Details:  Enter the “Sale Agent Count”, the number of real estate agents involved in the short sale transaction (count should include the buyer and seller agents)
  10. Closing Costs and Details:  Enter the total “Amount of Borrower Relocation Assistance” seller is receiving from all parties
  11. Closing Costs and Details:  Select the “Buyer Financing Type” from the drop-down box
  12. Closing Costs and Details:  Enter the “Broker Commission”, the amount the broker will receive for negotiating the short sale for the subject property
  13. Closing Costs and Details:  Select “Yes” or “No” to indicate if the agents representing the seller and the buyer are from the same real estate agency
  14. Closing Costs and Details:  Under “Type of Closing Cost” select applicable cost associated with closing the short sale for the subject property
  15. Closing Costs and Details:  Enter the “Closing Cost Amount” for selected closing cost type
  16. Closing Costs and Details:  If applicable, enter “Closing Cost Comments” for selected closing cost
  17. Bankruptcy:   Select the bankruptcy “Type Filed” from the drop-down box
  18. Bankruptcy:  Select the current bankruptcy “Status” from the drop-down box
  19. Bankruptcy:  If you indicate a bankruptcy has previously been submitted and for the “Type File” field you selected “Chapter 7” and the “Status” type is “Discharged” then for “If a discharged Chapter 7 bankruptcy, did the borrower subsequently reaffirm the mortgage loan?” you must select “Yes” or
    No” from the drop down box
  • Note: If you do not provide this field then SMDU will return the following message:  Unable to Evaluate; servicer has reported a Discharged Chapter 7 Bankruptcy but has not indicated whether the mortgage loan debt was reaffirmed. Please update and resubmit. (Message 5764)
  1. Subordinate Lien:  If applicable, enter the “Subordinate Lien Negotiated Release Amount”, the total negotiated amount of other lien(s) that are being released because of payments being made to the lien holders from the short sale proceeds

F. Submit the Short Sale case to Fannie Mae:  Once you have entered and reviewed all the data and are ready to submit the case click the Create a Short Sale Case button.

G. Case Submission will result in one of the following:

1. Successful: If the Short Sale submission is successfully submitted to Fannie Mae then you will receive a “Case Sent to Fannie Mae” message, and the case status will reflect “PFS - Awaiting Review”, indicating the case has been placed in Fannie Mae’s queue for review.

  • Note:  The case status will change as it moves through the subsequent steps of the Fannie Mae review process:
    • An “In Review” status means the case is being reviewed by a Fannie Mae REAM Representative.

    • An “Approved” or “Declined” status means the case has been decisioned by a Fannie Mae REAM Representative.  An email will be sent to the servicer contact who created the case detailing Fannie Mae’s recommendation and applicable details.

  • Note:  To view the case details you must do so via HSSN.  This functionality will be available via the SMDU UI in a future release.
  • Note:  A Fannie Mae REAM representative will email their recommendation and applicable details to the person who submitted the Create a Short Sale Case.

 

2. Unsuccessful Case Creation:  If the Short Sale submission is not successfully submitted to Fannie Mae you will receive a validation error message highlighted in red at the top of the page. Review the message and take appropriate measures to clear the error before resubmitting the case.

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