Section 423

Maturing Mortgage Loans

423.01

Written Policy

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must establish a written policy for maturing Mortgage Loans Mortgage LoansMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 , including:

  • overall monitoring responsibilities;
  • criteria for handoffs between functional groups (e.g., Special Asset Management Special Asset ManagementTeam performing Fannie Mae’s Special Servicing that can be contacted at [email protected]. , Special Credits, etc.);
  • Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! reporting;
  • sending Borrower BorrowerPerson who is the obligor per the Note. maturity notification letters; and
  • determining the Mortgage Loan’s Mortgage Loan’sMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 refinance eligibility.
423.02

Refinance Eligibility

On a monthly basis, beginning at least 24 months before each Mortgage Loan’s Mortgage Loan’sMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 Maturity Date Maturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must evaluate the Property’s Property’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). operating performance to determine the likelihood that the Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 UPB UPBUnpaid Principal Balance can be refinanced based on the current cap rate, and the DSCR DSCROn an annual basis or any specified period, the ratio of Net Cash Flow to the total of:  principal, interest, and required Mezzanine Financing or Hard Pay Preferred Equity payments. and NCF NCFAt underwriting or for any specified period, the amount calculated per Part II, Chapter 2: Valuation and Income, Section 203: Income Analysis and the applicable products and features in Part III. from the Property’s Property’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). most recent annual financial statement.

Participants from the Servicer’s Servicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. underwriting, asset management, portfolio management, and finance teams must coordinate to categorize each Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 as either:

  • “Meets Criteria” = the Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 qualifies for refinancing based on the currently published underwriting criteria of Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! or a third party; or
  • “Does Not Meet Criteria” = the Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 does not qualify for refinancing based on the currently published underwriting criteria of Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! or a third party.

For each Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 categorized as “Does Not Meet Criteria”, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:

  • review the Property’s Property’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). quarterly operating statements and analyze the operating expenses (especially repairs & maintenance and capital expenses) to assess whether the Borrower BorrowerPerson who is the obligor per the Note. is prudently managing the Property PropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). ; and
  • work with the Borrower BorrowerPerson who is the obligor per the Note. and Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! to ensure the Borrower BorrowerPerson who is the obligor per the Note. has a reasonable payoff plan.
423.03

Borrower Communications

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must send the following maturity notification letters to the Borrower BorrowerPerson who is the obligor per the Note. :

  • 12 months before the Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 Maturity Date Maturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , send the 12 Month Notice to Borrower – (In Place Loans) ( Form 4219 ):
    • notifying the Borrower BorrowerPerson who is the obligor per the Note. of the upcoming Maturity Date Maturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. ;
    • providing Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. contact information; and
    • requesting a detailed payoff plan.
  • 6 months before the Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 Maturity Date Maturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , send the 6 Month Notice to Borrower – (In Place Loans) ( Form 4220 ):
    • notifying the Borrower BorrowerPerson who is the obligor per the Note. of the upcoming Maturity Date Maturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. ;
    • requesting proof of a payoff plan (e.g., a commitment letter from another lender or sale contract); and
    • advising the Borrower BorrowerPerson who is the obligor per the Note. that the Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 will be in default if not paid off or refinanced.

Within 6 months of the Maturity Date Maturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must aggressively pursue a maturity solution for any Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 that “Does Not Meet Criteria” until the Borrower BorrowerPerson who is the obligor per the Note. provides written proof of a payoff plan, which may include a certified escrow letter, contact information for the new lender with appropriate follow-up by the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , or other reasonable evidence.

On the Maturity Date Maturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to issue 1 Short-Term Forbearance Letter for Maturity Defaults ( Form 6645 ) for a term of up to 1 month, provided no other defaults exist.  Default interest must be charged and a forbearance fee should not be collected.

423.04

Fannie Mae Communications

On the first Business Day Business DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. of each month, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a Maturing Loan Report using the mandated template to Multifamily Maturity Management Multifamily Maturity ManagementTeam that can be contacted at [email protected]. with information on each Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 maturing within the next 24 months (or advising that no Mortgage Loans Mortgage LoansMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 are maturing within the next 24 months), and categorizing each as “Meets Criteria” or “Does Not Meet Criteria” in the Performance Rating column.  The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must also update the Maturing Loan Report as new information becomes available with each monthly submission.

The comments section of the Maturing Loan Report must include, at a minimum:

  • a report of discussions with the Borrower BorrowerPerson who is the obligor per the Note. (e.g., potential new lender, term of new loan, proof of payoff plan received);
  • the anticipated payoff date; and
  • whether the Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 is likely or not to refinance, and the rationale.

All other Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! notices related to maturing Mortgage Loans Mortgage LoansMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 , including default notices, must be sent to Multifamily Maturity Management Multifamily Maturity ManagementTeam that can be contacted at [email protected]. .