F-1-25, Reclassifying or Voluntary Repurchasing an MBS Mortgage Loan (12/20/2023)

Under certain circumstances described in the Servicing Guide and below, Fannie Mae will remove a mortgage loan or compel the servicer to remove a mortgage loan from an MBS pool and place it in Fannie Mae’s portfolio. With the exclusion of PFP mortgage loans with a scheduled/scheduled remittance type, MBS mortgage loans (regular and special servicing option mortgage loans) removed from MBS pools in this manner will become actual/actual remittance-type mortgage loans that Fannie Mae will hold in its portfolio, identifying them by the Fannie Mae loan number, the servicer’s loan number, and the property address. PFP mortgage loans with an original scheduled/scheduled remittance type will remain a scheduled/scheduled remittance type even after being removed from the pool.

Note: For requirements for repurchasing an MBS mortgage loan, see A1-3-01, Requirements for Voluntary RepurchaseA1-3-01, Requirements for Voluntary Repurchase and Mandatory Repurchase of Certain MBS Mortgage Loans in A1-3-02, Fannie Mae-Initiated Repurchases, Indemnifications, Make Whole Payment Requests and Deferred Payment ObligationsA1-3-02, Fannie Mae-Initiated Repurchases, Indemnifications, Make Whole Payment Requests and Deferred Payment Obligations. See also A1-3-06, Automatic Reclassification of MBS Mortgage LoansA1-3-06, Automatic Reclassification of MBS Mortgage Loans for Fannie Mae’s selection criteria for automatic reclassification of special servicing option MBS mortgage loans.

The servicer must comply with all payment processing, remitting, accounting, and reporting requirements related to servicing reclassified mortgage loans as outlined in A4-1-02, Establishing Custodial Bank AccountsA4-1-02, Establishing Custodial Bank Accounts, and Part C, Mortgage Loan Payment Processing, Remitting, Accounting, and Reporting C, Mortgage Loan Payment Processing, Remitting, Accounting, and Reporting. If necessary, the servicer must contact its Fannie Mae Investor Reporting Representative (see F-4-02, List of ContactsF-4-02, List of Contacts) for assistance.

The servicer may confirm that Fannie Mae has reclassified a PFP mortgage loan by reviewing the PFP Reclass Report that is posted on Fannie Mae's investor reporting system.

A1-3-06, Automatic Reclassification of MBS Mortgage LoansA1-3-06, Automatic Reclassification of MBS Mortgage Loans describes the mortgage loans that Fannie Mae will select for reclassification. The timing of reclassification for an MBS mortgage loan which the servicer continues to report to Fannie Mae with a delinquency status code indicating forbearance plan or repayment plan is based on the MBS Pool Issue Date as outlined in the following table.

For mortgage loans with an MBS pool issue date on or after June 1, 2007 through December 1, 2008, on approximately the 11th calendar day of each month, Fannie Mae will post the Eligible for Deselection Report on Fannie Mae’s servicing solutions system. This report contains the applicable mortgage loans that have been reported to Fannie Mae with a delinquency status code indicating forbearance plan or repayment plan that Fannie Mae intends to reclassify. The following table outlines the actions that the servicer must take to deselect a mortgage loan for reclassification, as applicable.

The servicer must ensure that an MBS mortgage loan is removed from the MBS pool for the purposes of modification in accordance with D2-3.1-02, Conditions of a First and Second Lien Mortgage Loan Modification for an MBS Mortgage LoanD2-3.1-02, Conditions of a First and Second Lien Mortgage Loan Modification for an MBS Mortgage Loan.

The following table outlines the actions the servicer must take to reclassify a special servicing option MBS mortgage loan, or to voluntarily repurchase for a regular servicing option mortgage loan or a shared-risk special servicing option mortgage loan for which the servicer’s shared risk liability has not expired, based on the mortgage loan status at the time the mortgage loan modification is negotiated.

If the final Trial Period Plan payment (either third or fourth Trial Period Plan payment as applicable depending on the original mortgage loan status) is received after the 15th calendar day (the servicer’s reclassification or voluntary repurchase date) of the final month of the Trial Period Plan but before the end of the Trial Period Plan, then it will not be possible to reclassify or voluntary repurchase the mortgage loan from the MBS pool during the final month of the Trial Period Plan. In such event, the servicer must extend the Trial Period Plan one month, and the reclassification or voluntary repurchase date will be the 15th calendar day of such extended month. If the servicer has not notified Fannie Mae of its receipt of the final Trial Period Plan payment on or before the servicer’s reclassification or voluntary repurchase date, the servicer shall extend the Trial Period Plan for an additional month.

If the required Trial Period Plan payments are not made in accordance with the Trial Period Plan, Fannie Mae will cancel the case in Fannie Mae’s servicing solutions system.

The following table outlines the actions that the servicer must take after a mortgage loan has completed the Trial Period Plan.

When a regular or special servicing option MBS mortgage loan has been reclassified, the servicer must take the actions outlined in the following table.