Servicing Guide

Published November 10, 2020

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What are the servicer requirements related to the re-amortization option for a Fannie Mae mortgage loan with a Fannie Mae HAMP modification?

Communicating with a Borrower Regarding the Re-Amortization Option Related to the Expanded Borrower “Pay for Performance” Incentive for a Fannie Mae HAMP Modification

The following table outlines the servicer requirements related to the re-amortization option for a Fannie Mae mortgage loan with a Fannie Mae HAMP modification.

The servicer must ...
 

Provide written notice of an option to re-amortize the UPB, excluding deferred principal, over the remaining term of the mortgage loan if at the time of the notice the mortgage loan is in good standing. The written notice must

  • be provided at least 60 days, but no more than 120 days, prior to the sixth anniversary of the Fannie Mae HAMP modification effective date;

  • give the borrower at least 30 days, but no more than 180 days, from the date of the notice to respond to the re-amortization offer;

  • notify the borrower of any changes to P&I payments as required by applicable law;

  • specify changes to the payment schedule as a result of the re-amortization and total interest to be paid during the remaining term of the mortgage loan after the sixth anniversary of the Fannie Mae HAMP modification effective date, both with and without the effect of the re-amortization; and

  • include the contact information of the servicer and instruct the borrower to contact the servicer if the borrower has questions or concerns about the re-amortize offer.

Note: The servicer is authorized to include the notice of a re-amortization offer in other notices sent to the borrower, provided the timing requirements are met.

 

Apply the same re-amortization conditions to all mortgage loans serviced for Fannie Mae, however, the servicer is authorized to

  • require that the mortgage loan is current at the time of the re-amortization;

  • require that the borrower receives the expanded borrower “pay for performance” incentive prior to completing the re-amortization;

  • not send a notification to a borrower of the option to re-amortize the UPB if at the time the servicer sends its notifications the borrower is not eligible to receive the expanded borrower “pay for performance” incentive; and

  • not to send a notification to an eligible borrower of the option to re-amortize the UPB if the mortgage loan was re-amortized within the previous twelve months.

 

Provide the re-amortization at no expense to the borrower once the borrower accepts the re-amortization offer.

 

Perform a follow-up communication to the initial written notice using any acceptable communication methods as described in D2-2-01, Achieving Quality Right Party Contact with a Borrower if the borrower has not responded to the initial written notice.

 

Provide estimated amortization schedules upon the borrower’s request.

 

Process and document the mortgage loan re-amortization in accordance with Processing a Re-Amortization After Application of Additional Principal Payments in C-1.2-01, Processing Additional Principal Payments.

 

Ensure that the mortgage loan maintains its first lien position and is fully enforceable.

For more information please see: D2-3.2-04, Fannie Mae HAMP Modification.

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