Section 218
A Borrower BorrowerPerson who is the obligor per the Note. may elect to defease its 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 only if the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. permit defeasance. If the Borrower’s Borrower’sPerson who is the obligor per the Note. Mortgage Loan Documents Mortgage Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. do not permit defeasance, defeasance 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 is not permitted.
Prior to 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 Maturity Date Maturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. and during the Mortgage Loan's Defeasance Period, the Borrower BorrowerPerson who is the obligor per the Note. may defease the entire outstanding 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 accordance with the applicable terms and conditions of the Borrower's Borrower'sPerson who is the obligor per the Note. Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. and the provisions of this Section.
| 218.03 | |
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To accomplish the defeasance, the following procedures must be followed:
| 218.03A | |
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Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain the most current Defeasance DefeasanceTransaction where a Property is released from the lien of the Security Instrument and the Lender receives a valid and perfected lien and security interest in substitute collateral acceptable to Fannie Mae and the cash flows thereunder. documents from the Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! website. The Defeasance DefeasanceTransaction where a Property is released from the lien of the Security Instrument and the Lender receives a valid and perfected lien and security interest in substitute collateral acceptable to Fannie Mae and the cash flows thereunder. documents consist of the Defeasance Notice ( Form 4622 ) and other closing documents required by Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! in order for the defeasance to occur.
| 218.03B | |
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The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must complete the Defeasance Notice ( Form 4622 ) after verifying 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 eligible for defeasance and obtaining from the Borrower BorrowerPerson who is the obligor per the Note. the date on which the Borrower BorrowerPerson who is the obligor per the Note. desires to consummate the Defeasance DefeasanceTransaction where a Property is released from the lien of the Security Instrument and the Lender receives a valid and perfected lien and security interest in substitute collateral acceptable to Fannie Mae and the cash flows thereunder. . The Defeasance Close Date may not be more than 45 calendar days nor less than 30 calendar days after the date on which the Defeasance Notice is received by the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must use the Defeasance Calculator application on the Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! web site to estimate the Defeasance Deposit and the estimated Defeasance Deposit must be inserted in the appropriate box in the Defeasance Notice. The information on the Defeasance Notice will not be final until it is confirmed by Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! . Until then, the Defeasance Deposit and other information are estimates. The Defeasance Notice will specify (a) whether a Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! debt instrument will be offered for use as the substitute collateral and, if not, that U.S. Treasury Securities SecuritiesMBS, PFP MBS, or REMIC. will be the substitute collateral; and (b) whether the successor entity will be designated by Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! or Borrower BorrowerPerson who is the obligor per the Note. , and (c) the amount of the Defeasance Commitment Fee.
To be effective, the Borrower BorrowerPerson who is the obligor per the Note. must execute and send the Defeasance Notice to the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. so that the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. receives the Defeasance Notice no earlier than 11:00 a.m. and no later than 3:00 p.m. ET on a 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. .
The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must then sign and execute the Defeasance Notice and fax the Defeasance Notice and a copy of the Note NoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. to be defeased to its Fannie Mae Representative Fannie Mae RepresentativeFannie Mae personnel who assist you with various business matters (e.g., Fannie Mae Deal Team, pricing, delivery, servicing, asset management, etc.). .
Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! must receive the fax by 5:00 p.m. ET on the same day that the Defeasance DefeasanceTransaction where a Property is released from the lien of the Security Instrument and the Lender receives a valid and perfected lien and security interest in substitute collateral acceptable to Fannie Mae and the cash flows thereunder. Deposit was calculated for verification by Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! .
| 218.03C | |
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A Defeasance Commitment Fee equal to 1% of the scheduled 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 as of the Defeasance Close Date, must be paid by the Borrower BorrowerPerson who is the obligor per the Note. to the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. no later than the date and time when the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. receives the executed Defeasance Notice from the Borrower BorrowerPerson who is the obligor per the Note. . The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must wire the Defeasance Commitment Fee to Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! within 24 hours after receipt of the Borrower's Borrower'sPerson who is the obligor per the Note. executed Defeasance Notice.
Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! will verify 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 information contained in the Defeasance Notice as well as 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 eligibility for defeasance. After verification and within two (2) Business Days Business DaysAny 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. after the initial receipt of the Defeasance Notice from the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! will sign the Defeasance Notice and fax it back to the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. along with an Exhibit that details the monthly cash flows of the Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! debt instrument that will replace 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). as collateral for 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 .
The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. will then fax the verified Defeasance Notice to the Borrower BorrowerPerson who is the obligor per the Note. on the same day that the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. receives the verified Defeasance Notice from Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! . In the event that Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! made changes to the Defeasance Notice, the Borrower BorrowerPerson who is the obligor per the Note. must initial the changed portions of the Defeasance Notice and fax it back to the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. on that same day. The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must then immediately fax the Borrower BorrowerPerson who is the obligor per the Note. -initialed Defeasance Notice to Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! .
If the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. does not
- receive the Defeasance Commitment Fee, and
- provide confirmation of the Defeasance Notice to the Borrower BorrowerPerson who is the obligor per the Note. ,
| 218.03E | |
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On or before the Defeasance Close Date, the Borrower BorrowerPerson who is the obligor per the Note. must deliver to the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. a Defeasance Pledge Agreement ( Form 4529 ), creating a perfected security interest in the substitute collateral in favor of Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! .
| 218.03F | |
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The Borrower BorrowerPerson who is the obligor per the Note. must assign all its obligations and rights under the Note NoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. , together with the substitute collateral, to a successor entity designated by Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! or, if not so designated by Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! , designated by Borrower BorrowerPerson who is the obligor per the Note. and acceptable to Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! . The Borrower BorrowerPerson who is the obligor per the Note. and the successor entity shall execute and deliver to the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. a Defeasance Assignment and Assumption Agreement ( Form 4528 ).
| 218.03G | |
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The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must deliver to Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! by no later than 10 a.m. ET, five (5) Business Days Business DaysAny 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. before the Defeasance Close Date, the following documents:
- a Borrower's Counsel Opinion Letter ( Form 6618
) affirming:
- that each Defeasance DefeasanceTransaction where a Property is released from the lien of the Security Instrument and the Lender receives a valid and perfected lien and security interest in substitute collateral acceptable to Fannie Mae and the cash flows thereunder. Document constitutes the valid and legally binding obligation of the Borrower BorrowerPerson who is the obligor per the Note. , enforceable against the Borrower BorrowerPerson who is the obligor per the Note. in accordance with its terms;
- that the defeasance is not subject to avoidance under any applicable federal or state laws;
- that, if the Note NoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. is held by a REMIC Trust, then the defeasance has been effected in such a way that does not adversely affect the REMIC Trust; and
- such other opinions, certificates, documents or instruments as Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may reasonably request;
- the Defeasance Assignment and Assumption Agreement ( Form 4528 ); and
- the Defeasance Pledge Agreement ( Form 4529 ).
Transmittal of these documents shall be accompanied by a completed Multifamily Defeasance Transmittal Form ( Form 4631 ).
| 218.03H | |
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On or before the Defeasance Close Date, the Borrower BorrowerPerson who is the obligor per the Note. must pay to the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. an amount equal to the sum of:
- the next scheduled P&I P&IPrincipal and interest payment due under the Note NoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. ;
- all other sums then due and payable under the Note NoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. , the Security Instrument Security InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. and any other Loan Document Loan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; and
- all costs and expenses incurred by the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in connection with the defeasance, including any out-of-pocket fees and disbursements of the Servicer's Servicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. legal counsel.
| 218.03I | |
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If a Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! investment security will be the substitute collateral, then, on or before 3:00 p.m. ET on the Defeasance Close Date, the Borrower BorrowerPerson who is the obligor per the Note. must pay the Defeasance Deposit (reduced by the Defeasance Commitment Fee) to the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to be used by the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , as the Borrower's Borrower'sPerson who is the obligor per the Note. agent, to purchase the Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! Investment Security.
The Borrower BorrowerPerson who is the obligor per the Note. or Closing Agent must wire the Defeasance Deposit to Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. by 3:00 p.m. ET on the Defeasance Closing Date. The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must wire the Defeasance Deposit (reduced by the Defeasance Commitment Fee) to Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! for receipt by 5:00 p.m. ET on the Defeasance Closing Date.
| 218.03J | |
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Upon the Borrower's Borrower'sPerson who is the obligor per the Note. compliance with the Defeasance DefeasanceTransaction where a Property is released from the lien of the Security Instrument and the Lender receives a valid and perfected lien and security interest in substitute collateral acceptable to Fannie Mae and the cash flows thereunder. requirements, 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). will be released from the lien of the Security Instrument Security InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. . Upon release of 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). , the Note NoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. will be secured by the pledge of the Substitute Collateral.
If the Borrower BorrowerPerson who is the obligor per the Note. timely pays the Defeasance Commitment Fee and the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and the Borrower BorrowerPerson who is the obligor per the Note. timely transmit a signed facsimile copy of the Defeasance Notice, but the Borrower BorrowerPerson who is the obligor per the Note. fails to consummate the defeasance, Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! shall have the right to retain the Defeasance Commitment Fee as liquidated damages for the Borrower's Borrower'sPerson who is the obligor per the Note. default and, subject to the terms and conditions of the Note NoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. , the Borrower BorrowerPerson who is the obligor per the Note. shall be released from all further obligation to defease the Note NoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. under the given Defeasance Notice.
| 218.03L | |
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In the event that the Defeasance DefeasanceTransaction where a Property is released from the lien of the Security Instrument and the Lender receives a valid and perfected lien and security interest in substitute collateral acceptable to Fannie Mae and the cash flows thereunder. is not consummated on the Defeasance Closing Date for any reason, the Borrower BorrowerPerson who is the obligor per the Note. must reimburse the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. for all third-party costs and expenses incurred by the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in its reliance on the Defeasance Notice executed by the Borrower BorrowerPerson who is the obligor per the Note. , within five (5) Business Days Business DaysAny 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. after the Borrower BorrowerPerson who is the obligor per the Note. receives a written demand for this reimbursement.
| 218.03M | |
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Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! will transfer the defeased 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 from the Servicer's Servicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. servicing portfolio effective on the first day of the second month following the Defeasance Closing Date. The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. will be required to report and remit payments for the next scheduled P&I P&IPrincipal and interest payment collected as part of the Defeasance Closing. Thereafter, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. will no longer be required to perform other servicing requirements for the defeased 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 . Beginning on the 18th calendar day of the second calendar month after the Defeasance Closing Date (or the next 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. if such day is not a 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. ) until the maturity 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 , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. will receive the remaining scheduled servicing fee for 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 minus five (5) basis points provided the Authorization for ACH Remittance ( Form 4630 ) has been submitted.