For a borrower’s monthly payment to be considered in imminent default for the purpose of determining eligibility for a Fannie Mae Short Sale or a Fannie Mae Mortgage Release, the borrower must satisfy
the initial eligibility criteria, and
either the credit or hardship eligibility criteria.
The servicer must take the steps in the following table to perform the imminent default evaluation, unless the borrower’s debt has been discharged pursuant to Chapter 7 of the U.S. bankruptcy code, in which case the servicer must evaluate the borrower for a Fannie Mae short sale in accordance with D2-3.3-01, Fannie Mae Short Sale or Fannie Mae Mortgage Release in accordance with D2-3.3-02, Fannie Mae Mortgage Release (Deed-in-Lieu of Foreclosure).
|1||Determine if all initial eligibility criteria are satisfied.|
|?||Initial Eligibility Criteria|
|The mortgage loan is current or less than 60 days delinquent as of the evaluation date.|
|The property securing the mortgage loan is occupied as a principal residence by at least one borrower.
Note: If a servicemember receives a PCS order where the transfer or new employment location is greater than 50 miles one way from the property securing the mortgage loan, the property securing the mortgage loan must have been or currently be the servicemember’s principal residence.
|The borrower submits a complete BRP (see D2-2-05, Receiving a Borrower Response Package for additional information).|
|The borrower’s non-retirement cash reserves are less than $25,000 based on information provided in the Mortgage Assistance Application (Form 710), or equivalent.
Note: If a servicemember receives a PCS order where the transfer or new employment location is greater than 50 miles one way from the property securing the mortgage loan, and the property securing the mortgage loan was or currently is the servicemember’s principal residence, he or she is exempt from the non-retirement cash reserves requirement.
|The borrower has a hardship as documented in accordance with Form 710, or equivalent.|
|2||Determine if either the credit or hardship eligibility is satisfied.|
|Credit||A FICO credit score less than or equal to 620, and either
|Hardship||The borrower has one of the following hardships as documented in accordance with Form 710, or equivalent:
See below for related Q&A's:
For more information please see: D2-1-01, Determining if the Borrower's Mortgage Payment is in Imminent Default.