Servicing Guide

Published October 14, 2020

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SMDU™ UI User Guide 7.39 October (Create a Mortgage Release™ Case without Using an SMDU Evaluation of Mortgage Release Eligibility

  

Create a Mortgage Release™ Case without Using a SMDU Evaluation of Mortgage Release Eligibility (Delegated or Non-Delegated Case)

This section provides instruction on how to create a Mortgage Release case for a loan in which:

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

Things to know before getting started:

  • Currently REOgrams cannot be submitted via the SMDU UI. Therefore, you must submit the REOgram notification through Asset Management Network (AMN).   
  • For a Mortgage Release case Fannie Mae will continue to email the decision and applicable details to the servicer contact provided in the case creation details.
  • Case details of a successfully created Mortgage Release can be viewed in HSSN. This functionality will be available in the SMDU UI prior to the retirement of HSSN.
  •  If an active case exists, the Create Mortgage Release icon will be grayed out and the current case must be completed or cancelled before a new one can be created.

 

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 to 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 Mortgage Release decision is “Conditionally Qualified” (results show 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 may need to go to the “Evaluate for Workout” instructions

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.

    • If you click on the green checkmark above DIL then you can see the SMDU Trial Structuring Results calculated for an eligible Mortgage Release. Below the SMDU calculated results are passed messages, which are not included in screenshot.

 Note: If the SMDU Mortgage Release Decision is “Conditionally Qualified” and:

 

You are not using a SMDU evaluation to create a Mortgage Release because the borrower is Conditionally Qualified for a Mortgage Release (DIL) (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” instructions.

If after a resubmission to SMDU the borrower is eligible or ineligible for a Mortgage Release and you want to use the SMDU evaluation to create the Mortgage Release case, please refer to the “Create a Mortgage Release™ Case using a SMDU Mortgage Release Eligibility”.

D. To create a case for mortgage release select the Create Mortgage Releaseicon.

E. The Create Mortgage Release (DIL) Case 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 Mortgage Release 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 Mortgage Release Case using a SMDU decisioned result?” (refer to the screen shot below). 

  • When “No” is selected the Create Mortgage Release creation page may still be pre-populated with the data from the latest SMDU evaluation.  Review the 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) 

Note: Data elements 7-11 should match the data reported to Fannie Mae via SURF.

  1. Property:  If applicable, update the complete physical “Property Address
  2. Property:  If applicable, enter or update the physical “Property Address (Line 2)
  3. Property:  If applicable, update the “Property City
  4. Property:Property State” is provided. If incorrect, update investor reporting (SURF) before submitting the case
  5. Property:  If applicable, update the five digit “Property Zip Code
  6. Property:  Enter or update the “Property Number of Units” from drop-down
  7. Property:  Enter or update the “Current Property Usage” from drop down-box
  8. 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 conducted within the last 90 days.
  9. Property:  Select or update answer by selecting “Yes” or “No” to indicate whether there are any known structural or environmental problems with subject property
  10. Property:  Select or update the current “Property Occupancy Status” from drop-down box
  11. Property:  Select the “Intended Property Usage” from drop-down box
  12. Property Valuation:  Enter “Property Value at Origination
  13. Property Valuation: Enter the “Property “As Is” Value” determined by the valuation method used (e.g. BPO)
  14. Property Valuation:  Enter the “Property Valuation Type” from the drop-down box 
  15. 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:   For immediate move out options Mortgage Release accepts either a BPO, Appraisal or AVM.  For transition options servicers should provide either a BPO or Appraisal.      
      • Note:  If the property valuation data is greater than 90 days then you will need to get an updated valuation.
      • 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 Mortgage Release reviews might require a different type of evaluation.
  16. Property Valuation:  Enter the “LMV As Repaired Value Amount”, this amount is usually included on the BPO
  17. Property Valuation:  Enter the “Valuation List Price
  18. Property Valuation:  Enter the “Market Value Analysis Company Name” that completed the property valuation
  19. Property Valuation:  Enter the “Market Value Analysis Preparer Name” that completed the property valuation
  20. Property Valuation:  If applicable, enter “Market Value Analysis Comments” you want to convey to Fannie Mae
  21. Property Valuation:  If applicable, enter “Recommended Repair Description” provided in the property valuation
  22. Foreclosure:  If applicable, enter the “Foreclosure Attorney Contact Name
  23. 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
  24. Foreclosure:  Select “Estimated” or “Scheduled” from the drop-down box to describe the “Foreclosure Sale Date Type
  25. 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 the servicer evaluated the loan for a Mortgage Release
  26. Servicer Recommendation:  Select “Yes” or “No” to indicate whether the servicer recommends the approval of the Mortgage Release
  27. Servicer Recommendation:  Enter your justification and/or comments supporting your recommendation in Servicer Workout Comments
  28. Servicer Recommendation:  Enter any additional information and/or comments in Servicer General Comments
  29. Sale Details:  Enter the “Property List Start Date” by entering the date (MM/DD/YYYY) or selecting the date by clicking on the calendar icon
  30. Borrower Contribution:  Enter the “Borrower Contribution”, which is the cash contribution the borrower will contribute to cure the outstanding balance
  31. Delinquency/Fees and Costs:  Enter the “Delinquent Interest”, for Modification capitalization.
  32. 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 be confused with how actual “Delinquent Interest” is calculated for capitalization for a modification.
  1. Delinquency/Fees and Costs:  Enter the “Attorney Fees/Costs”, not included in escrow for Other Advances .
  2. Escrow/Hazard Insurance:  Enter the current “Escrow Payment” collected as part of the 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. 
  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
  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: If applicable, 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
  1. 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 whether the borrower is eligible for streamlined documentation
  4. Borrower Details:  Enter the borrower’s gross “Total Monthly Income Type (Post-Workout)
  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
  • NoteSMDU 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. Borrower Details:  Unless reviewing for streamlined documentation, enter “Assets”, any which have value in the market, you do this by selecting the “+Add” button. You should select all that apply for this borrower.  DO NOT enter any information about the subject property in this section. 
  3. Borrower Details:  Unless reviewing for streamlined documentation, enter “Income”, the monthly gross income, unless description in drop-down says otherwise, you do this by selecting the +Add” button. You should select all that apply for this borrower. If for example you are entering Social Security Income you will need to remember to be sure to gross it up.
  1. Closing Costs and Details:  Enter the total “Amount of Borrower Relocation Assistance” borrower is receiving from all parties
  2. Closing Costs and Details:  If applicable, enter any “DIL Data Comments” you want to communicate to Fannie Mae
  3. Closing Costs and Details:  If applicable, select “Yes” or “No” to indicate if the rental assignment agreement has been received
  4. Closing Costs and Details:  If applicable, select “Yes” or “No” to indicate if there is a reason to waive the 90-day listing requirement 
  5. Bankruptcy:   Select the bankruptcy “Type Filed” from the drop-down box
  6. Bankruptcy:  Select the current bankruptcy “Status” from the drop-down box
  7. 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
  • 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
  2. Subordinate Lien:  If applicable, select the “Subordinate Lien Type” being released
  3. Subordinate Lien:  Enter the “Subordinate Lien Amount” for selected subordinate lien type
  4. Subordinate Lien:  Enter the “Subordinate Lien Holder Name” for selected subordinate lien type
  5. Subordinate Lien:  To add additional subordinate lien type select the “+Add Additional Subordinate Lien” link and then enter the applicable subordinate lien details
  6. Litigation:  Select “Yes” or “No” to indicate if there is an additional lien on the property which would prevent a DIL workout

 

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


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

Successful: If the Mortgage Release submission is successfully submitted to Fannie Mae then you will receive a “Case Sent to Fannie Mae” message, and the case status will reflect “DIL - Awaiting Review”, indicating the.  case has been placed in queue for review by a Fannie Mae REAM Representative.

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.

                            

                   NoteCase details can be viewed in HSSN.  This functionality will be available in the SMDU UI prior to the HSSN retirement.

                   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 Mortgage Release submission is not successfully submitted to Fannie Mae 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 for review.

 

Recommended Next Step: Updating/Closing a Mortgage Release Case

 

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