Servicing Guide

Published September 9, 2020

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SMDU™ UI User Guide 7.38 September 2020 (Evaluate for “First-Time Final” Prior Workout History and Litigation)

See below for sub-topic: Evaluate for “First-Time Final” - Prior Workout History and Litigation  

To see other sub-topics for Evaluate for "First-Time Final", please click on any of the topics below:

Evaluate for “First-Time Final” - Overview

Evaluate for “First-Time Final” - Borrower and Bankruptcy details

Evaluate for “First-Time Final” - Property and Origination details

Evaluate for “First-Time Final”- Delinquency & Foreclosure, Insurance & Escrow and Hardship

 

Recommended Next Step: Prior Workout History

Click here to access the interactive Evaluate for First Time Final eLearning module

Prior Workout History

Litigation

L.     From the left-hand navigation bar select the Prior Workout History link.

  • Note: This screen will be populated with prior workouts reported to Fannie Mae by the servicer. If a borrower has never had a prior workout, there will be no prior workout history displayed on the Prior Workout History page.
  • Note: If prior workout history exists in Fannie Mae’s Servicing Solutions System then SMDU will retrieve this data and will display it on this page into two sections: Closed and Completed AND All Other Workouts.
    • If a prior workout history record doesn’t exist in Fannie Mae’s Servicing Solutions System then you need to select the “Add Additional Prior Workout” link and complete all fields for such workout. (Example One below)
    • The Closed and Completed workout histories will also be partially populated in the “To Submit to SMDU” grid at the top of the page. You will need to complete all open fields. (Example Two below)
    • The All Other Workouts will be listed and any that have “Add as Failed Trial” next to them need to be reviewed to determine if they are truly “failed trials”. If they are “failed trials’ then you need to select the “Add as Failed Trial” box next to applicable workout history and it will be added to the “To Submit to SMDU” grid. You will need to complete all open fields. (Example Three below)
      • A failed trial is one where the initial trial payment was received but the borrower either failed to make all trial payments and/or return the final modification agreement.

Example One: No Prior Workout History reported to Fannie Mae

1. To add a prior workout that has not been previously reported to Fannie Mae select “+Add Prior Workout”, this will open up the “TO SUBMIT TO SMDU” grid

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

3. Select the workout “Status” from the drop-down box

4. Select the “Workout Type” from the drop-down box

5. Select the workout “Activity Type” from the drop-down box

6. Enter the “Payment Reduction Percent”, if prior workout provided a reduction of the pre-workout monthly payment (PITIAS), provide amount of payment reduction, expressed as a percentage. Report this data field regardless of whether or not workout was completed by borrower.

7. Select the workout “Fail/Cancel Reason” from the drop-down box

8. If you inadvertently add a prior workout history and need to remove, select the “Delete” link by the applicable row to remove subject workout

9. To add an additional workout click the “+Add Additional Prior Workout” link and then enter all details for each additional hardship by following steps 2-7 above

Example Two: Closed or Completed workout previously reported to Fannie Mae

1. Select the “Workout Type” from the drop-down box

  1. Enter the “Payment Reduction Percent”, if prior workout provided a reduction of the pre-workout monthly payment (PITIAS), provide amount of payment reduction, expressed as a percentage.

3. Enter “Subsequent Delinquency Severity”, report greatest number of missed payments within the first 12 months of effective date of workout. Report zero if loan had no subsequent delinquency. Report zero if loan was reinstated on or after 12 months from effective date of the modification.

Example: If the borrower was three payments behind, but is now only two months past due, report value of three.

4. Select the “View Additional Workout Details” link to view additional details from a previously reported workout, when you are done viewing select “Close Additional Workout Details

Example Three: Report Failed Trial previously reported to Fannie Mae

1. Select the “Add as Failed Trial” button (the “To Submit to SMDU” grid will open up)

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

3. Select the “Workout Type” from the drop-down box

  1. Enter the “Payment Reduction Percent”, if prior workout provided a reduction of the pre-workout monthly payment (PITIAS), provide amount of payment reduction, expressed as a percentage.

5. If you inadvertently add a prior workout history and need to remove, select the “Delete” link by the applicable row to remove subject workout

6. Select the “View Additional Workout Details” link to view additional details from a previously reported workout, when you are done viewing select “Close Additional Workout Details

Recommended Next Step: Litigation

M. From the left-hand navigation bar select the Litigation link.

1. Select “+Add Litigation

2. Select the litigation “Type” from the drop-down box

3. Select the current litigation “Status” from the drop-down box

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

5. Select “Yes” or “No” to indicate whether or not the litigation affects the subject property

6. Select “Yes” or “No” to indicate whether or not the litigation affects title or limits valid transfer of title

7. If you inadvertently add a litigation and need to remove, select the “Delete” link by the applicable row to remove subject litigation

8. To add an additional litigation click the “+Add Additional Litigation” link and then enter all details for each additional litigation by following steps 2-6 above

N. Submit the Evaluation Request:  Once you have entered and reviewed all the data and are ready to submit the case click the Submit to SMDU for First-Time 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.

O. 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

P. 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 does not have a resolved hardship.

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. 

However, if after talking to the borrowers they are no longer interested in retaining the subject property then you will need to select the Property link from the left-hand navigation bar, change the “Intended Property Usage” field to “Sell Do Not Retain” and reselect the Submit to SMDU for First-Time Final Evaluation button.  SMDU will re-evaluate the loan and provide you with an update “SMDU Results Bar”. 

3. To view the trial 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 screenshots below, a couple of sections will be broken down to provide additional details regarding the results provided by SMDU. 

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

Note:  If the borrower does not accept the trial plan terms or fails to make the first trial payment then nothing needs to be cancelled in the SMDU UI.  An SMDU evaluation response provides the terms that should be offered to the borrower and is not reported to Fannie Mae, we call this the Auto-Decisioning side of SMDU. 

The only time something needs to be cancelled is when an actual case has been reported to Fannie Mae, we call this the Case Management side of SMDU.  Actual cases are created by either reporting the first trial payment, requesting a second look review or creating a manual submission and will need to be cancelled if the borrower fails the trial plan terms in one of the following scenarios:

The first trial payment is recorded and the borrower either fails to make the remainder of the trial payments or return the final modification documents.

The case was submitted for a second look review or a non-delegated manual submission review was submitted to Fannie Mae and the borrower failed to make the first trial payment.

 

To see other sub-topics for Evaluate for "First-Time Final", please click on any of the topics below:

Evaluate for “First-Time Final” - Overview

Evaluate for “First-Time Final” - Borrower and Bankruptcy details

Evaluate for “First-Time Final” - Property and Origination details

Evaluate for “First-Time Final”- Delinquency & Foreclosure, Insurance & Escrow and Hardship

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