F-2-05, Historical Yield Differential Adjustment Provisions (08/16/2017)

Introduction

This exhibit contains historical yield differential adjustment provisions.

Historical Yield Differential Adjustment Provisions

Historical Yield Differential Adjustment Provisions

Fannie Mae's present yield differential adjustment policy and a history of the various yield differential adjustment policies that may apply to mortgage loans are dependent on whether the mortgage loan is a fixed-rate mortgage loan, an ARM loan, or a co-op share loan.

Provisions for Fixed-Rate Mortgage Loans: The following table describes the historical yield differential adjustment policies for fixed-rate mortgage loans, except for co-op share loans.

Date of Commitment	Terms of Provision
June 22, 1981 to Fannie Mae investor reporting system conversion date¹	Gross Yield Commitment: The servicer and Fannie Mae each retain one-half of the first 0.25% excess. After that, the servicer retains one-fourth of any other excess and Fannie Mae retains three-fourths. Net Yield Commitment: After the excess is reduced by a minimum servicing fee of 0.375%, the remaining excess is shared under the same formula as shown above.
Fannie Mae investor reporting system date¹to present	The servicer retains all excess yield.

Date of Commitment

Terms of Provision

June 22, 1981 to Fannie Mae investor reporting system conversion date¹

Gross Yield Commitment: The servicer and Fannie Mae each retain one-half of the first 0.25% excess. After that, the servicer retains one-fourth of any other excess and Fannie Mae retains three-fourths.

Net Yield Commitment: After the excess is reduced by a minimum servicing fee of 0.375%, the remaining excess is shared under the same formula as shown above.

Fannie Mae investor reporting system date¹to present

The servicer retains all excess yield.

Provisions for ARM Loans: The following table describes the historical yield differential adjustment policies for ARM loans, except for co-op share loans.

Date of Commitment	Terms of Provision
August 15, 1983 to September 10, 2017²	If Fannie Mae purchased the mortgage loan at par, the servicer retains until the first interest rate change any excess above the difference between the net mortgage rate and Fannie Mae's required yield. After that, the servicer may retain the amount by which the net mortgage margin³ exceeds Fannie Mae's required margin. If Fannie Mae purchased the mortgage loan at a discount, the servicer retains until the first interest rate change any excess above the difference between the net mortgage rate and Fannie Mae's required yield. After that, the servicer receives no excess.
On and after September 11, 2017	For whole loans, at rate reset the lender pass-through rate must be calculated using the top-down method of calculation. See, 5-02, Calculations Related to Pass-through Rates in Fannie Mae’s Investor Reporting Manual for additional information regarding this calculation method.

Date of Commitment

Terms of Provision

August 15, 1983 to September 10, 2017²

If Fannie Mae purchased the mortgage loan at par, the servicer retains until the first interest rate change any excess above the difference between the net mortgage rate and Fannie Mae's required yield. After that, the servicer may retain the amount by which the net mortgage margin³ exceeds Fannie Mae's required margin.

If Fannie Mae purchased the mortgage loan at a discount, the servicer retains until the first interest rate change any excess above the difference between the net mortgage rate and Fannie Mae's required yield. After that, the servicer receives no excess.

On and after September 11, 2017

For whole loans, at rate reset the lender pass-through rate must be calculated using the top-down method of calculation. See, 5-02, Calculations Related to Pass-through Rates in Fannie Mae’s Investor Reporting Manual for additional information regarding this calculation method.

Provisions for Co-op Share Loans: The following table describes the historical yield differential adjustment policies for co-op share loans.

Date of Commitment	Terms of Provision
May 11, 1984 through August 26, 1984	The servicer retains all excess yield for ARM loans. After the excess for a fixed-rate mortgage is reduced by a minimum servicing fee of 0.375%, the remaining excess is shared as follows: Fannie Mae and the servicer each retain one-half of the first 0.25% excess. After that, the servicer retains one-fourth of any other excess and Fannie Mae retains three-fourths.
August 27, 1984 to September 10, 2017	For both *ARM loans* and *fixed-rate mortgage loans* , the servicer retains all excess yield.
On and after September 11, 2017	For ARM whole loans, at rate reset the lender pass-through rate must be calculated using the top-down method of calculation. See, 5-02, Calculations Related to Pass-through Rates in Fannie Mae’s Investor Reporting Manual for additional information regarding this calculation method.

Date of Commitment

Terms of Provision

May 11, 1984 through August 26, 1984

The servicer retains all excess yield for ARM loans. After the excess for a fixed-rate mortgage is reduced by a minimum servicing fee of 0.375%, the remaining excess is shared as follows:

Fannie Mae and the servicer each retain one-half of the first 0.25% excess.
After that, the servicer retains one-fourth of any other excess and Fannie Mae retains three-fourths.

August 27, 1984 to September 10, 2017

For both ARM loans and fixed-rate mortgage loans , the servicer retains all excess yield.

On and after September 11, 2017

For ARM whole loans, at rate reset the lender pass-through rate must be calculated using the top-down method of calculation. See, 5-02, Calculations Related to Pass-through Rates in Fannie Mae’s Investor Reporting Manual for additional information regarding this calculation method.

The date that the mortgage seller was converted to the Fannie Mae investor reporting system. The dates that the Fannie Mae regional offices implemented the Fannie Mae investor reporting system are: Atlanta, November 26, 1984; Chicago, December 3, 1984; Dallas, December 3, 1984; Pasadena, December 10, 1984; and Philadelphia, November 5,1984.

Different provisions apply for any interest rate-capped ARM plan mortgage loans delivered under commitments dated on and after February 19, 1985. Under those provisions, the servicer retains until the first interest rate change any excess above the difference between the net mortgage rate and Fannie Mae's required yield. The net mortgage rate is determined by subtracting the 0.5% minimum servicing fee from the mortgage interest rate. Then, on each interest rate change date, the servicer is allowed to retain the amount by which the new net mortgage rate exceeds Fannie Mae's new required PTR. The required PTR is determined by adding the net required margin to the index value, and then comparing the result to the maximum allowable required yield that was determined for both the per-adjustment and lifetime interest rate limitations when Fannie Mae purchased the mortgage. If the calculated PTR exceeds the maximum allowable required yield, that yield becomes the PTR

The net mortgage margin is determined by subtracting the 0.5% minimum servicing fee from the margin specified in the mortgage instrument.

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