This topic contains information on qualifying a delinquent mortgage loan for a mortgage assistance workout option.
If someone is interested in purchasing a property that secures a delinquent mortgage loan with an enforceable due-on-sale (or due-on-transfer) provision and assuming the mortgage loan, the servicer must take the actions listed in the following table.
|✓||The servicer must...|
|Obtain a complete BRP from the existing borrower to determine his or her inability to continue making payments on the mortgage loan (see D2-2-05, Receiving a Borrower Response Package for information on obtaining a complete BRP).|
|Ensure that the property purchaser qualifies for the mortgage loan in accordance with Fannie Mae's underwriting guidelines in place at the time of qualification (see F-1-28, Reviewing a Transfer of Ownership for Credit and Financial Capacity.|
|Order an appraisal or an interior BPO for the subject property. Also see D1-4.1-05, Enforcing the Due-on-Sale (or Due-on-Transfer) Provision for additional information.|
|Obtain the mortgage insurer's written approval, if applicable. The servicer must follow the procedures in Obtaining MI Approval for a Conventional Mortgage Loan in F-1-17, Processing a Transfer of Ownership for information on obtaining mortgage insurer approval.|
|Follow the procedures in Requesting Approval for the Assumption of a Delinquent Conventional Mortgage Loan in F-1-24, Requesting Fannie Mae’s Approval via Fannie Mae’s Servicing Solutions System to determine whether Fannie Mae is willing to forego enforcement of the due-on-sale (due-on-transfer) provision.|
|Repurchase an MBS mortgage loan from the MBS pool before the assumption is finalized, if applicable.|
If approved by Fannie Mae, the servicer must document each approved assumption with an assumption agreement, or by an assumption and release agreement if a release of liability was agreed to, and record the agreement if required by state law. The servicer must follow the procedures in Completing a Transfer of Ownership in F-1-17, Processing a Transfer of Ownership for detailed requirements related to executing the assumption (or assumption and release) agreement.
As a condition of approving the assumption, the servicer may charge the property purchaser an assumption fee (see Allowable Fees for Special Services in A2-3-05, Fees for Special Services). The servicer is authorized to pass any out-of-pocket expenses related to the assumption on to the purchaser.