205.01

Adjustable Rate Mortgage Loan Interest Rate Changes and Required Monthly Payments

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must enforce 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 in accordance with the terms of the executed Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .  This includes making periodic interest rate and payment adjustments in connection with any type of Adjustable Rate Mortgage Loans Adjustable Rate Mortgage LoansMortgage Loan with an interest rate that periodically adjusts based on an Index per the Note or Loan Documents. .  The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must change 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 interest rate and monthly payments to the fullest extent permitted or required, maintaining at all times 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 margin specified in the executed Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .  Factors used to determine the new interest rate for ARM Loans include:

  • the Index IndexBasis for determining the Gross Note Rate of an ARM Loan, including any required alternative index that may be determined necessary by Fannie Mae because the Index is no longer widely accepted or has been replaced as the index for similar financial instruments. on which the rate is to be based;
  • the “look back” period;
  • any applicable interest rate change limitations; and
  • 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 margin.

If the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. fails to make a timely interest rate or payment adjustment, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must use its own funds to satisfy any shortage.

205.01A

The Adjustable Rate Mortgage Loan Index

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must determine the Index IndexBasis for determining the Gross Note Rate of an ARM Loan, including any required alternative index that may be determined necessary by Fannie Mae because the Index is no longer widely accepted or has been replaced as the index for similar financial instruments. on which the rate is to be based as specified in the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .  To assist the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in monitoring indexes, Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! offers an ARM Loan ARM LoanMortgage Loan with an interest rate that periodically adjusts based on an Index per the Note or Loan Documents. Index IndexBasis for determining the Gross Note Rate of an ARM Loan, including any required alternative index that may be determined necessary by Fannie Mae because the Index is no longer widely accepted or has been replaced as the index for similar financial instruments. service through its website on https://multifamily.fanniemae.com.  The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must establish procedures to monitor the Index IndexBasis for determining the Gross Note Rate of an ARM Loan, including any required alternative index that may be determined necessary by Fannie Mae because the Index is no longer widely accepted or has been replaced as the index for similar financial instruments. to assure that the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. uses the latest available Index IndexBasis for determining the Gross Note Rate of an ARM Loan, including any required alternative index that may be determined necessary by Fannie Mae because the Index is no longer widely accepted or has been replaced as the index for similar financial instruments. to determine an interest rate change.

205.01B

Determining the New Monthly Payment

Except for Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! Structured ARM Loans, a Required Monthly Payment change occurs at established intervals and corresponds to any change in the interest rate.  The new monthly payment is calculated by determining the amount required to repay the UPB UPBUnpaid Principal Balance of 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 in substantially equal payments over the remaining amortization period of 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 at the interest rate in effect following the latest interest rate change utilizing the applicable Interest Calculation Method.  If 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 an interest-only 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 , the new monthly payment is the monthly interest payment at the interest rate in effect following the latest interest rate change utilizing the applicable Interest Calculation Method.  The new Required Monthly Payment becomes effective on the first day of the month following the month in which the interest Rate Change Date occurs.