Servicing Guide

Published September 9, 2020

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What criteria must be followed when determining eligibility for a Fannie Mae Flex Modification?

In order to be eligible for a Fannie Mae Flex Modification, all of the criteria in the following table must be met.

Eligibility Criteria for a Fannie Mae Flex Modification
  The mortgage loan must be a conventional first lien mortgage loan.

Note: The property securing the mortgage loan may be vacant or condemned.

  The mortgage loan must be at least 60 days delinquent or the servicer has determined that the borrower's monthly payment is in imminent default in accordance with Evaluating a Borrower for Imminent Default for Conventional Mortgage Loan Modification Eligibility in D2-1-01, Determining if the Borrower’s Mortgage Payment is in Imminent Default.
  The mortgage loan must have been originated at least 12 months prior to the evaluation date for the mortgage loan modification.
  The mortgage loan must not be subject to
  • a recourse or indemnification arrangement under which Fannie Mae purchased or securitized the mortgage loan or that was imposed by Fannie Mae after the mortgage loan was purchased or securitized;

  • an approved liquidation workout option;

  • an active and performing forbearance plan or repayment plan, unless otherwise directed by Fannie Mae;

  • a current offer for another mortgage loan modification or other workout option; or

  • an active and performing modification Trial Period Plan.

 

The mortgage loan must not have been modified three or more times previously, regardless of the mortgage loan modification program or dates of prior mortgage loan modifications.

Note: A payment deferral does not count as a mortgage loan modification when determining the number of times the mortgage loan has previously been modified for purposes of determining eligibility for a Fannie Mae Flex Modification.

  The borrower must not have failed a Fannie Mae Flex Modification Trial Period Plan within 12 months of being evaluated for eligibility for another Fannie Mae Flex Modification.

Note: Converting from a Trial Period Plan to a forbearance plan is not considered a failed Trial Period Plan.

  The mortgage loan must not have received a Fannie Mae Flex Modification and become 60 days or more delinquent within the first 12 months of the effective date of the mortgage loan modification without being reinstated.

If the borrower has experienced a disaster-related hardship, the servicer must follow the requirements described in Soliciting a Borrower with a Disaster-Related Hardship for a Fannie Mae Flex Modification and Evaluating a Borrower Who Defaulted After Completing a Disaster Payment Deferral for a Fannie Mae Flex Modification

If the eligibility criteria for a Fannie Mae Flex Modification is not satisfied, but the servicer determines there are acceptable mitigating circumstances, the servicer is authorized to offer a mortgage loan modification outside of these requirements by submitting a request through Fannie Mae's servicing solutions system for review and obtaining prior approval from Fannie Mae. Generally, the servicer's determination of acceptable mitigating circumstances is based on a review of the borrower's complete BRP.

If the borrower converts from a Trial Period Plan to a forbearance plan, the borrower may subsequently be eligible for a Fannie Mae Flex Modification upon successful completion of the forbearance plan and, if eligible, must be placed in a new Fannie Mae Flex Modification Trial Period Plan based on the delinquency status at the time of the evaluation for the Fannie Mae Flex Modification.

For more information please see: D2-3.2-07: Fannie Mae Flex Modification.

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