Servicing Guide

Published September 9, 2020

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SMDU™ UI User Guide 7.38 September 2020 (Evaluate for “First-Time Final”- Delinquency & Foreclosure, Insurance & Escrow and Hardship)

See below for sub-topic: Evaluate for “First-Time Final”- Delinquency & Foreclosure, Insurance & Escrow and Hardship  

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” - Prior Workout History and Litigation

 

Recommended Next Step: Delinquency & Foreclosure

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

Delinquency & Foreclosure

Insurance & Escrow

Hardship

I. From the left-hand navigation bar select the Delinquency & Foreclosure link.

1. Enter the loan’s “Delinquent Interest” for capitalization, amount of delinquent interest from the loan’s expected last paid installment date before capitalization until one month prior to the loan’s expected “Modification 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.

2. Enter the loan’s “Delinquent Interest Through Submission Date Amount” for liquidation, which is a calculation of the delinquent interest based on the loan’s current last paid installment 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.

3. Enter “Other Advances”, includes all other items that may need to 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 are captured in their own respective standalone data fields and are included in the SMDU capitalization calculation.

4. Enter estimated “Attorney Fees/Costs”, the amount that will be capitalize

5. Enter “Accrued Late Fee/Penalty” amount

6. Enter “Number of times the borrower has been exactly 30 days delinquent within the last six months

  • Note: During the last months of delinquency reporting, indicate the number of times the borrower has been exactly one month past due
  • Note: When a loan is less than sixty days delinquent and a servicer does not provide the “Number of times the borrower has been exactly 30 days delinquent within the last six months” (a required data field for IDE) in the SMDU Request, SMDU will derive that number. If a servicer does provide the number in the SMDU Request, SMDU will use the servicer-provided number in the IDE evaluation. The number used by SMDU for the IDE will be returned in the SMDU Response.

Review the four different scenarios to help aid you in completing this data element.

Example 1:

In this example, at the beginning of January the loan has a due date of 01/01/2018. This makes the loan current, zero month’s delinquent, and is not considered 30 days delinquent in January. At the beginning of February, the borrower had not made their January payment. As a result, this makes the loan one-month delinquent, which is considered 30 days delinquent. At the beginning of March, the borrower had not made their January payment. As a result, the loan due date remains 01/01/2018. This makes the loan two months delinquent, which is considered 60 days delinquent. No payments were made in April, May or June, therefore the loan due date remains 01/01/2018. The loan in April is three months delinquent (90 days delinquent); in May is four months delinquent (120 days), and in June is five months delinquent (150 days). None of those months qualify as a 30 day delinquency. Therefore, for the six-month period from 01/01/2018 to 06/01/2018, the borrower is considered to have experienced one 30-day delinquency and the “Number of times the borrower has been exactly 30 days delinquent within the last six months” should be populated with a value of one.

Example 2:

In this example, at the beginning of January the loan has a due date of 01/01/2018. This makes the loan current, zero month’s delinquent, and is not considered 30 days delinquent in January. At the beginning of February, the borrower had not made their January payment. As a result, this makes the loan one-month delinquent, which is considered 30 days delinquent. At the beginning of March, the borrower had not made their January payment. As a result, the loan due date remains 01/01/2018. This makes the loan two months delinquent, which is considered 60 days delinquent. A payment was made in March, which advanced the due date to 02/01/2018 at the beginning of April. However, since the loan is still two months delinquent, this is still considered to be 60 days delinquent. In May the loan is current and remains current in June. Therefore, for the six-month period from 01/01/2018 to 06/01/2018, the borrower is considered to have experienced one 30-day delinquency and the “Number of times the borrower has been exactly 30 days delinquent within the last six months” should be populated with a value of one.

Example 3:

In this example, at the beginning of January the loan has a due date of 01/01/2018. This makes the loan current, zero month’s delinquent, and is not considered 30 days delinquent in January. At the beginning of February, the borrower had not made their January payment. As a result, this makes the loan one-month delinquent, which is considered 30 days delinquent. At the beginning of March, the loan still has a due date of 01/01/2018. This makes the loan two months delinquent, which is considered 60 days delinquent. A payment was made in March, which advances the due date to 02/01/2018 at the beginning of April. However, since the loan is still two months delinquent, this is still considered to be 60 days delinquent. In April the loan is brought current and is now due for the May payment. No payments are received in May and at the beginning of June the loan has a due date of 05/01/2018, making the loan one-month delinquent, which is considered to be 30 days delinquent. Therefore, for the six month period from 01/01/2018 to 06/01/2018, the borrower is considered to have experienced two 30-day delinquencies and the “Number of times the borrower has been exactly 30 days delinquent within the last six months” should be populated with a value of two.

Example 4:

In this example, at the beginning of January the loan has a due date of 11/01/2017. This makes the loan two months delinquent, which is considered 60 days delinquent. In January, one payment has been received, which advanced the due date to 12/01/2017. However, since the loan is still two months delinquent, this is still considered to be 60 days delinquent. In February the payments are brought current and remain current through June. Therefore, for the six-month period from 01/01/2018 to 06/01/2018, the borrower is considered to have experienced no 30-day delinquencies and the “Number of times the borrower has been exactly 30 days delinquent within the last six months” should be populated with a value of zero

7. Enter “Number Consecutive Payments on Rolling Delinquency

  • Note: During the last six months report the total consecutive number of months that the borrower has made one contractual payment, regardless of delinquency. A payment does not have to been made in the current month to be considered in this evaluation.
  • Note: This field must be provided in the SMDU Request in order for a borrower to be evaluated for a Cap and Extend Modification with BRP Waiver. It is recommended you ALWAYS complete this field with each SMDU Request so that SMDU can properly evaluate each loan through the waterfall versus you having to go back and enter this field for a second SMDU evaluation.

8. Enter “Borrower Contribution”, any amount over and above the trial payments that the borrower will contribute to the modification during trial

9. Enter “Suspense Balance” amount, any partial mortgage payment(s) made by the borrower that the servicer is holding and has not yet applied to the loan

10. Enter “Amount Expected Before Trial Payment”, any amount expected to be paid by borrower between the loan evaluation date and receipt of first trial payment

11. Select “What is borrower(s)’ SCRA relief status” from the drop-down box

12. Select “Yes” or “No” to indicate whether or not the borrower obtained a mortgage in the six months prior to the delinquency and/or being evaluated for a pre-foreclosure sale or mortgage release (aka Deed-in-Lieu), excluding the subject property

13. If applicable, select the loan’s “Foreclosure Status” from the drop-down box

14. 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

15. Select from the “Foreclosure Sale Date Type” drop down box to indicate if future foreclosure sale date is estimated or scheduled

16. If applicable, enter the “Foreclosure Attorney Contact Name

17.If applicable, enter the “Foreclosure Attorney Contact Phone Number

 

Recommended Next Step: Insurance & Escrow

J. From the left-hand navigation bar select the Insurance & Escrow link.

1. If applicable, select the “Mortgage Insurance Company Name” from the drop-down box

2. If applicable, enter the “Mortgage Insurance Certificate Number

3. If applicable, enter the “Mortgage Insurance Coverage Percentage

4. If applicable, enter the “Mortgage Insurance Claim Amount”, estimated mortgage insurance amount to be paid at the time of workout

5. Enter the “Estimated Mortgage Insurance Proceeds”, estimated hazard or flood insurance proceeds (if no proceeds you MUST enter a $0.00)

6. Enter the “Estimated Hazard Insurance Proceeds”, estimated hazard or flood insurance proceeds (if no proceeds you MUST enter a $0.00)

7. If applicable, enter the “Mortgage Insurance Required Borrower Contribution Amount”, mortgage insurance requires borrower to pay at the time of workout

8. If applicable, enter your “Contact at Mortgage Insurance

9. If applicable, enter your “Mortgage Insurance Contact Phone Number

10. For “Is escrow prohibited by law?” select “Yes” or “No” to indicate whether or not escrow is prohibited by law

11. For “Will property taxes be escrowed?” select “Yes” or “No” to indicate whether or not property taxes will be escrowed, if escrow NOT prohibited by law you must answer “Yes

12. For “Will hazard insurance be escrowed?” select “Yes” or “No” to indicate whether or not hazard insurance will be escrowed, if escrow NOT prohibited by law you must answer “Yes

13. For “Will flood insurance be escrowed?” select “Yes” or “No” to indicate whether or not flood insurance will be escrowed, if escrow NOT prohibited by law you must answer “Yes

14. For “Will association or HOA dues be escrowed?” select “Yes” or “No” to indicate whether or not dues will be escrowed

15. If applicable, enter the capitalized “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

16. Enter the “Current Escrow Shortage Monthly Payment” amount, monthly payment amount associated with current repayment of escrow account shortages (before escrow analysis is completed for the loan modification)

17. Enter the “Future Escrow Shortage Monthly Payment” amount, monthly payment amount associated with repayment of escrow account shortages identified during the projected escrow analysis for the loan modification

18. 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 a Fannie Mae Extend Modification for Disaster Relief (EMOD) to calculate the additional monthly escrow shortage created by the escrow advance amount.

  1. 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.
  2. If a servicer provides a value of zero (not null) or greater than 60, SMDU will return a validation error.
  3. 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 the Extend Mod

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”.

Note: If the loan was Eligible for a Cap and Extend Modification (CMOD) for Disaster Relief or a FLEX Modification Disaster, the Trial Payment and Monthly Housing Expense Post-Workout Amount is not impacted by the “Escrow Advances” provided in the SMDU request.

Recommended Next Step: Hardship

K. From the left -and navigation bar select the Hardship link.

1. Select hardship “Reason” from drop down box

  • Note: You are responsible for ensuring that the hardship reason(s) reported to SMDU via the SMDU UI is consistent with the hardship reason(s) contributing to the borrower’s need for loss mitigation evaluation. You should report all hardships documented in the borrower’s MortgageAssistance Application Form 710. Additionally, you may report any other contributory hardships based on documented conversations or other documentation provided by the borrower.

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. If applicable, 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

  • Note: If you are working on a solicitation and you select “Unknown - Borrowers Response Package Not Required” as the hardship reason then you do not enter dates nor the primary hardship duration.
  • Note: If the primary hardship duration is short term/temporary then you need to enter both start and end dates.
  • Note: If the primary hardship duration is long term or permanent then you need to enter a start date but not an end date.

4. To add an additional hardship click the “+Add Additional Hardship” link and then enter all details for each additional hardship by following steps 1-3 noted above

5. Select “Primary Hardship Duration” from drop down box

  • Note: Form 710 asks the borrower to define their hardship duration(s) as either short term (under six months), medium term (6 -12 months) or long term/permanent (greater than 12 months). Long term and permanent hardship durations are treated the same by SMDU since the Fannie Mae Servicing Guide policies uses them interchangeably.

Recommended Next Step: Prior Workout History

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” - Prior Workout History and Litigation

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