Fannie Mae is implementing policy changes effective immediately relating to documentation requirements for modifications of delinquent and imminently defaulting single-family mortgage loans under the Home Affordable Modification Program (HAMP) that potentially could affect the timing for the removal of delinquent mortgage loans from a Single-Family Mortgage-Backed Securities (MBS) pool.
Under HAMP, the borrower typically enters into a three-month trial period (or four-month trial period if the servicer has determined that the borrower's default is imminent), while a mortgage loan is in an MBS pool. Fannie Mae's policy will now require that a servicer receive both the last trial period payment and all of the required documentation prior to removing a delinquent mortgage loan from an MBS pool.
These changes may affect the timing for removal of delinquent loans from MBS pools for purposes of modification. For additional information regarding the removal of delinquent loans from an MBS pool and the impact on MBS, please see “YIELD, MATURITY, AND PREPAYMENT CONSIDERATIONS—Maturity and Prepayment Considerations—Trust Agreement Provisions and Servicing Policies and Practices Regarding Troubled Loans” in our MBS Prospectus, dated June 1, 2009.
Investors may contact our Fixed-Income Securities Helpline at 1-888-BOND HLP (1-888-266-3457) if they have additional questions.
Last revised: 11/24/09