© 2018 Fannie Mae Single Family Servicing Guide
Processing Additional Principal Payments for Current Mortgage Loans
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The servicer must follow the procedures in Processing a Curtailment in F in F-1-11, Processing Mortgage Loan Payments and Payoffs for Payoffs for detailed instructions related to applying a curtailment for a current mortgage loan.
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Modified Mortgage Loans: The following table outlines how the servicer must apply a curtailment on a modified mortgage loan.
If the curtailment being applied… | Then the servicer must apply such curtailment… |
is less than the interest-bearing UPB | to the interest-bearing UPB. |
is greater than or equal to the interest-bearing UPB | in the following order to the 1. deferred UPB, if any; and 2. interest-bearing UPB. |
Note: For processing HAMP “pay for performance” incentives, see Incentive Compensation for a HAMP Modification in F in F-1-27, Processing a Workout Incentive Fee.
Processing Additional Principal Payments for Delinquent Mortgage Loans
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Note: For processing HAMP “pay for performance” incentives, see Incentive Compensation for a HAMP Modification in F in F-1-27, Processing a Workout Incentive Fee.
Reapplying Principal Payments to Cure a Delinquency
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a portfolio mortgage loan; or
a participation pool mortgage loan (which is not a mortgage loan that has been pooled to back an MBS issue, including PFP mortgage loans); and as long as all of the following conditions apply:
the borrower submits a written request;
the reapplication of the principal prepayment does not result in the mortgage loan balance being higher than it would have been had the original amortization schedule for the mortgage loan been followed;
the borrower has not previously received modification assistance program funds from an HFA. See D2See D2-3.1-05, Interacting with Housing Finance Agencies and Hardest Hit Fund Programs for Programs for additional information; and
the borrower agrees to submit any additional funds that are needed to supplement the prepayment so that the total delinquency can be cured. If the borrower cannot raise the additional funds, the servicer is authorized to combine the reapplication of a principal prepayment with a workout option. See D2-3, Fannie Mae’s Home Retention and Liquidation Workout Options for additional information.
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complete an Agreement for Modification, Re-Amortization, or Extension of a Mortgage (Form 181). Form 181 must 181 must only be revised as authorized in its instructions;
provide the borrower and the document custodian the completed Form completed Form 181; and
report the payment change as described in Reporting a Transaction Type 83 (Payment/Rate Change Record) in the Investor Reporting Manual.
The servicer must determine, in compliance with applicable law, if the borrower is required to execute Form 181 to execute Form 181 to ensure that the mortgage loan maintains its first lien position and is fully enforceable.
Related Announcements
The following table provides references to Announcements that are related to this topic.
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