This topic contains the following:
An MBS mortgage loan typically must be removed from its MBS pool no later than when the mortgage loan is 24 months past due, in accordance with Mandatory Repurchase of Certain MBS Mortgage Loans in A1-3-02, Fannie Mae-Initiated Repurchases, Indemnifications, Make Whole Payment Requests and Deferred Payment Obligations. Rather than requiring the servicer to repurchase certain delinquent MBS mortgage loans that are serviced under the special servicing option—those for which Fannie Mae has the entire foreclosure loss risk and those for which Fannie Mae and the servicer share the foreclosure loss risk, with Fannie Mae having the responsibility for marketing the acquired property—Fannie Mae will reclassify a conventional mortgage loan that satisfies its selection criteria as an actual/actual remittance type portfolio mortgage loan (however, PFP mortgage loans with an original scheduled/scheduled remittance type will remain a scheduled/scheduled remittance type even after being removed from the pool).
Generally, Fannie Mae will select special servicing option delinquent MBS mortgage loans for reclassification when the mortgage loan is 24 months delinquent, as measured by the LPI date. However, when applicable, reclassification will occur earlier than 24 months delinquency when the mortgage loan is:
paid in full, or where the related lien is released or charged-off;
repurchased by a seller/servicer under applicable selling and servicing requirements;
entering a permanent modification, which generally requires it to be removed from the MBS pool. During any modification trial period, the loan will remain in the MBS until the trial period ends;
subject to a short sale or Mortgage Release; or
referred to foreclosure.
The servicer must follow the procedures in F-1-25, Reclassifying or Voluntary Repurchasing an MBS Mortgage Loan for handling the mortgage loans that Fannie Mae has selected for reclassification.
All MBS mortgage loans (regular servicing and special servicing option mortgage loans) removed from MBS pools will be held in Fannie Mae’s portfolio subject to repurchase requirements. The servicer remains responsible for the recourse obligation on a regular servicing option mortgage loan that is removed from the pool and held in Fannie Mae’s portfolio.
The servicer must change its internal records to reflect the appropriate reclassification remittance type, as described in the Investor Reporting Manual and F-1-25, Reclassifying or Voluntary Repurchasing an MBS Mortgage Loan.