Servicing Guide

Published October 14, 2020

For best results, pose your search like a question.

Guide Resources

For a comprehensive list of resources such as forms, announcements, lender letters, notices and more.

Visit Selling and Servicing Guide Communications and Forms

Customers Recommend Ask Poli

AskPoli

If you have additional questions, Fannie Mae customers can visit Ask Poli to get information from other Fannie Mae published sources.

Launch Ask Poli  

Download PDF Guide

You can also download the printable ~800 page PDF, which include links.

Download Now

SMDU™ UI User Guide 7.39 October 2020 (Create Second Lien Consideration)

Create Second Lien Consideration 

This section provides instruction on how to create a case for a loan to report a second lien consideration. 

  1. Search for the loan by using the Fannie Mae 10-digit loan number.
  2. If the loan search is successful you will be brought to the Loan Landing page, which features the main actions banner and is comprised of a variety of sections, including the “Recent SMDU Evaluation History.

       C. To create a second lien consideration case, select the Create Second Lien Consideration link under the Other Actions section.

      D. The Create Second Lien Consideration page opens.  You are responsible for completing and/or updating all applicable data.

  • NoteYou can also hover your cursor over the name of the respective data field to read the definition

 

  1. Loan Details: Last Reported UPB to Fannie Mae” is the loan’s last unpaid principal balance reported to Fannie Mae via Investor Reporting (SURF)
  • NoteConfirm the “Last Reported UPB to Fannie Mae” matches what is on your system of record, if it does not match then you will need to stop and update through investor reporting (SURF) to proceed.  It will take 24 hours for any updates through investor reporting (SURF) to show up in SMDU.
  1. Loan Details: Reported Last Paid Installment Date” is the loan’s last paid installment date reported to Fannie Mae via Investor Reporting (SURF)
  • Note:  Confirm the “Reported Last Paid Installment Date” matches what is on your system of record, if it does not match then you will need to stop and update through investor reporting (SURF) to proceed.  It will take 24 hours for any updates through investor reporting (SURF) to show up in SMDU.
  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:Property State” is provided, if not correct then investor reporting (SURF) needs to be updated before you submit the case
  5. Property:  Enter or update the five digit “Property Zip Code” (should match what was previously reported to Fannie Mae in SURF)
  6. Property:  Select or update answer by selecting “Yes” or “No” to indicate whether there are any known structural or environmental problems with subject property
  7. Property:  Select or update the current “Property Occupancy Status” from drop down box
  8. Property:  Select or update the current “Intended Property Usage” from drop down box
  9. Property Valuation:  Enter “Property Value at Origination
  10. Property Valuation: Enter the “Property “As Is” Value” determined by the valuation method used (e.g. BPO)
  11. Property Valuation:  Enter the “Property Valuation Type” from the drop-down box 
  12. 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. 
  13. Property Valuation:  Enter the “LMV As Repaired Value Amount”, this amount is usually included on the loan’s BPO
  14. First Mortgage Loan Details:  Enter the “First Mortgage Fannie Mae Loan Number
  15. First Mortgage Loan Details:  Enter the “First Mortgage Seller Servicer Number
  16. First Mortgage Loan Details:  Enter the “First Mortgage Pre-Workout Unpaid Principal Balance Amount
  17. First Mortgage Loan Details:  Enter the “First Mortgage Pre-Workout Principal and Interest Payment Amount
  18. First Mortgage Loan Details:  Enter the “Anticipated Foreclosure Expense Amount
  19. First Mortgage Loan Details:  Select “Case Recommendation” from drop-down box
  20. Servicer Recommendation:  Select “Yes” or “No” to indicate whether servicer recommends approving the charge off
  21. Servicer Recommendation:   If applicable, enter “Servicer’s General Comments
  22. Delinquency/Fees and Costs:  Enter the “Delinquent Interest” 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. 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:  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
  2. Escrow/Hazard Insurance:  If applicable, enter the capitalized “Escrow Balance” amount, any amount based off projected escrow analysis already paid by servicer and any escrow advances servicer expects to pay on behalf of borrower
  3. Servicer Contact Information: If applicable, enter or update the "Servicer Contact Name", the person responsible for working with Fannie Mae on modification
  4. Servicer Contact Information: If applicable, enter or update the "Servicer Contact Email Address", the person responsible for working with Fannie Mae on modification
  5. Servicer Contact Information: If applicable, enter or update the "Servicer Contact Phone Number"
  6. Servicer Contact Information: If applicable, enter or update the "Servicer Contact Phone Number Extension"
  7. Foreclosure: If available, enter or update the "Foreclosure Attorney Contact Name
  8. Foreclosure: If available, enter or update the "Projected Foreclosure Sale Date” by entering the date (MM/DD/YYYY) or selecting the date by clicking on the calendar icon
  9. 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. Borrowers:  Enter Borrower One’s “First Name
  3. Borrowers:  Enter Borrower One’s “Last Name
  4. Borrower Details:  To add an additional borrower select the “+Add Borrower” link and then enter all details for Select Yes or No to indicate whether the borrower has ever filed bankruptcy.
  5. Bankruptcy:   If applicable, select the current bankruptcy “Type Filed” from the drop-down box
  6. Bankruptcy:   If applicable, 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 box

E. Submit the charge off case to Fannie Mae:  Once you have entered and reviewed all the data and are ready to submit the case click the Submit for Second Lien Consideration button

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

    1. Successful:  If the second lien consideration submission is successfully submitted to Fannie Mae then you will receive a “Case Sent to Fannie Mae” message, and the case status will reflect “SECOND LIEN CONSIDERATION - Awaiting Review”.  “Awaiting Review” means 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.
  • An “Approved” or “Declined” status means the case has been decisioned by a Fannie Mae.  An email will be sent to the servicer contact who created the case detailing Fannie Mae’s recommendation and applicable details.
  • Note:  A Fannie Mae representative will email their recommendation and applicable details to the person who submitted the Create Second Lien Consideration.
  1. Unsuccessful Case Creation:  If the second lien consideration submission is not successfully submitted to Fannie Mae then you will receive a validation error message highlighted in red at the top of the page, and you will need to review the message and take appropriate measures to clear the error.

  • Note:  In the screenshot above the message is letting you know that you need to add or update the “Servicer Contact Email Address” field.  Once updated you will need to reselect the “Submit for Second Lien Consideration” button to resubmit your case request to Fannie Mae.
  • Note:  If you receive a message indicating that gross monthly income needs to be provided, you will need to update previously entered data by completing the following steps:
    • From the functionality bar select the Create Manual Submission icon and once opened select the Borrowers link from the left-hand navigation bar
    • On the Borrowers page remove the “Total Monthly Income” and return “Total Monthly Income Type” to “Select…
    • Then select the Create Second Lien Consideration link under Other Actions and resubmit your second lien consideration request to Fannie Mae

 

Have You Tried Ask Poli?

Poli knows. Just ask.

Ask Poli features exclusive Q&As and
more—plus official Selling & Servicing
Guide
content.

Try Ask Poli

Related Articles


AskPoli

Customers Recommend Ask Poli

If you have additional questions, Fannie Mae customers can visit Ask Poli to get information from other Fannie Mae published sources.

Guide Resources

For a comprehensive list of resources such as access forms, announcements, lender letters, notices and more.

Visit Selling and Servicing Guide Communications and Forms

X
Having Issues with Seeing this Page Correctly?

Use Firefox or Chrome   How to do a hard refresh in Internet Explorer
We recommend that you use the latest version of FireFox or Chrome.

Download Firefox
Download Chrome
  A hard refresh will clear the browsers cache for a specific page and force the most recent version of a page.
    Hold the Ctrl key and press the F5 key.
     

Email Us
If you still have Technical Support questions, feel free to emailAsk_Poli@fanniemae.com.