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Reverse Mortgage Loan Servicing Manual: Chapter 2, Doing Reverse Mortgage Loan Business with Fannie Mae (7/12/2023)

See below for Chapter 2, Doing Reverse Mortgage Loan Business with Fannie Mae 

To see other Chapters of the Fannie Mae Single-Family Reverse Mortgage Loan Servicing Manual, please click on any of the chapters below:

Chapter 1, Reverse Mortgage Loan Products

Chapter 3: General Servicing Requirements

Chapter 4: Assisting Borrowers At Risk of Default or In Default

Chapter 5: Processing Claims and Managing Acquired Properties

Chapter 6: Reporting through eBoutique

Chapter 7: Quick Reference Materials

 

Chapter 2, Doing Reverse Mortgage Loan Business with Fannie Mae

This chapter contains the following topics:

 

2-01, Mortgage Loan Files and Records (05/28/2014)

The servicer must retain all evidence of compliance with Fannie Mae policy and make all records, regardless of the format, available to Fannie Mae upon request. See Servicing Guide A2-5, Individual Mortgage Loan Files and Records for additional information.

Related Announcements
There are no recently issued Announcements related to this topic.

2-02, Servicing Fees Related to Reverse Mortgage Loans (05/28/2014)

The servicer’s total servicing fee for a reverse mortgage loan is a specified dollar amount as indicated in the mortgage loan documents, rather than the difference between the mortgage loan interest rate and the rate at which the servicer passes through interest to Fannie Mae.

Related Announcements
There are no recently issued Announcements related to this topic.

2-03, Property Insurance Policy and Coverage Requirements (12/21/2022)

The servicer must follow all applicable HUD requirements for property insurance policy and coverage requirements for HECM loans.

For Home Keeper mortgage loans, see Servicing Guide B-2, Property Insurance Requirements for additional information.

Related Announcements
The table below provides references to recently issued Announcements that are related to this topic.

Announcements Issue Date
Announcement SVC-2022-08 December 21, 2022

2-04, Lender-Placed Insurance Requirements (10/14/2015)

The servicer must follow all lender-placed insurance requirements found in the  Servicing Guide B-6-01, Lender-Placed Insurance Requirements.  

Related Announcements
There are no recently issued Announcements related to this topic.

2-05, Establishing Custodial Bank Accounts (05/11/2022)

The servicer must hold in a custodial bank account prior to its remittance to Fannie Mae any funds it receives for a portfolio mortgage loan or an MBS mortgage loan. 

The servicer must provide Fannie Mae with a status of the funds in the custodial account at the end of each month.

The servicer is responsible for the safekeeping of custodial funds at all times. Even if the servicer has complied with all of the requirements of the Manual and the Servicing Guide, Fannie Mae will hold the servicer responsible for any loss of funds deposited in a custodial account and any damages Fannie Mae suffers because of delays in obtaining the funds from the custodial account.

The servicer must reconcile its cash book to the custodial accounts on a monthly basis. The servicer must refer to Servicing Guide A4-1-02, Establishing Custodial Bank Accounts for additional information on the requirements for establishing and maintaining custodial accounts and funds on behalf of Fannie Mae.

This section contains information on the following:

Requirements for Custodial Bank Accounts

If the servicer uses a custodial account for reverse mortgage loans, the custodial account must be separate from those used for regularly amortizing mortgage loans. The servicer must use the separate custodial account only for

  • disbursing funds to the borrower (and, if applicable, an insurance carrier, taxing authority, repair contractor, or mortgage insurer),
  • depositing funds received from Fannie Mae,
  • remitting funds to Fannie Mae, and
  • transferring servicing fees into the servicer’s internal operating account.

The servicer must take the following steps for each custodial account that is established (or changed).

Step

Servicer Action

1

Obtain a fully executed Form 1013 signed by both the servicer and the depository institution.

2

Forward the executed original form to the address listed on the form for processing.

3

Retain a copy of each form in its files.

The P&I custodial account must be titled as follows:

(Name of servicer), as agent, trustee, and/or bailee for the benefit of Fannie Mae and/or payments of various mortgagors and/or various owners of interests in mortgage-backed securities (Custodial Account).

Use of Clearing Accounts

When clearing accounts are used for reverse mortgage loans, the servicer is not required to establish separate accounts for collections and disbursements. However, if the servicer chooses to establish a separate custodial account, deposits to the clearing account must be subsequently recorded in a separate custodial account meeting Fannie Mae's custodial requirements within one business day (including any period during which funds were in a clearing account or general ledger account) of receipt.

The servicer may use general ledger or internal operating accounts as clearing accounts provided that:

  • the institution is an eligible depository and meets the requirements outlined in Servicing Guide A4-1-02, Establishing Custodial Bank Accounts, 
  • the account is titled to indicate it is custodial in nature and includes “for the benefit of Fannie Mae” in the account title, and
  • adequate records and audit trails must be maintained to support all credits to, and charges from, the borrower's payment records and the clearing accounts.

NOTE: Servicing fees and, if applicable, purchase proceeds can be transferred directly from this clearing account into the servicer’s internal operating account without going through the separate custodial account.

Establishing Drafting Arrangements

The servicer must designate a drafting arrangement for a custodial account from which Fannie Mae will draft funds or to change an existing arrangement for reverse mortgage loans as described in Fannie Mae’s CRS User Guide
Related Announcements
The table below provides references to recently issued Announcements that are related to this topic.

Announcements     Issue Date
Announcement SVC-2022-03 May 11, 2022
Announcement SVC-2018-04 June 13, 2018

 

2-06, Submitting Expense Reimbursement Claims (05/11/2018)

Prior to foreclosure, the servicer must submit expense reimbursement claims via eBoutique. (See 5-01, Submitting the REOgram.)

After foreclosure, the servicer must submit expense reimbursement claims via Property 360™. The servicer must not submit expense reimbursement claims via Property 360™ prior to the mortgage loan’s liquidation date. Failure to submit a reimbursement claim through the appropriate system may result in denial of the claim.

The servicer must submit its final expense reimbursement claim no later than 60 days after the date Fannie Mae disposes of an acquired property.

For HECM loans, the servicer is authorized to submit its final expense reimbursement claim beyond 60 days after the date Fannie Mae disposes of an acquired property, as long as it is submitted within 30 days of receipt of an initial or supplemental AOP from HUD.

N O T E : Any expense reimbursement claim submitted more than 60 days post-disposition must include an AOP in the supporting documents.

If the servicer submits an expense reimbursement claim after the final deadline, Fannie Mae will deny the request.

Related Announcements
The table below provides references to recently issued Announcements that are related to this topic.

Announcements     Issue Date
Announcement RVS-2018-01 April 11, 2018

2-07, Post-Delivery Transfers of Servicing (10/13/2021)

The servicer of reverse mortgage loans must refer to Servicing Guide A2-7-03, Post-Delivery Servicing Transfers for detailed requirements related to post-delivery transfers of servicing.

The servicer must submit a separate Request for Approval of Servicing or Subservicing Transfer (Form 629) for all reverse mortgage loans that are part of the portfolio of mortgage loans being transferred.

With regard to the submission of final accounting reports and remittances, the transferee servicer must submit the monthly Loan Activity Reports in eBoutique.

Related Announcements
The table below provides references to recently issued Announcements that are related to this topic.

Announcements     Issue Date
Announcement SVC-2021-07 October 13, 2021

To see other Chapters of the Fannie Mae Single-Family Reverse Mortgage Loan Servicing Manual, please click on any of the chapters below:

Chapter 1, Reverse Mortgage Loan Products

Chapter 3: General Servicing Requirements

Chapter 4: Assisting Borrowers At Risk of Default or In Default

Chapter 5: Processing Claims and Managing Acquired Properties

Chapter 6: Reporting through eBoutique

Chapter 7: Quick Reference Materials

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