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Creating a Declining Premium Prepayment Type Payoff Quote

To create a payoff quote for a mortgage loan that includes a declining premium prepayment type, follow the steps below. You need information from the following sources to complete the payoff quote:

  • Your organization’s servicing system
  • The borrower’s written notice of intent to prepay

Completing Create PayOff Page 1

To complete Create PayOff Page 1, follow these steps:

  1. On the PayOff Quote screen, click Create.

    The Create PayOff Page 1 appears.

     

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  2. Enter the Fannie Mae Loan Number.

    Note: The Payoff Calculator generates quotes only for mortgage loans in Fannie Mae’s eServicing system. If the mortgage loan is not in eServicing, contact your Fannie Mae servicing analyst for assistance.

  3. Select Yes, No, or Waived from the drop-down box to indicate whether the mortgage loan is still in its prepayment lockout period. If you select Waived, you must also enter a comment indicating the reason for the waiver.

  4. Select Declining Premium (DP) from the Prepayment Type drop-down box. You must complete this and the following step even if the borrower no longer has a prepayment obligation.

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  5. Enter the DP Percent found in the mortgage loan documents.

  6. Complete the remaining fields on Create PayOff Page 1 as follows:

    Note Date
    Enter the Note Date drawn from the mortgage loan documents.

    Expected LPI Date
    Enter the Expected LPI Date as of the expected payoff date.

    Expected Payoff Date
    Enter the Expected Payoff Date based on the borrower’s notice of intent to prepay.

    Liquidation Reason
    Select the reason from the drop-down box. If the reason is not listed, choose “Other” and enter a description in the Comments box.

    Borrower Notification Date
    Enter the date that the borrower provides you, as the servicer, with written notice of intent to prepay.

    Notification Criteria
    Select the applicable Notification Criteria from the drop-down box.

    The loan documents specify the number of days’ written notice that a borrower must provide of intent to prepay.

    UPB at Payoff
    Enter the UPB at Payoff based on the expected payoff date and the expected LPI date.

  7. Click Next.

    Note: The system may display edits at the top of the screen if you leave any required fields blank or enter data in the wrong format. If so, correct the data and click Next again.

    The Create PayOff Page 2 appears.

Completing Create PayOff Page 2

Create PayOff Page 2 is divided into the four sections described below. The screenshots illustrate the payoff calculation for a sample mortgage loan assuming that it was originated in June 2009, delivered to Fannie Mae under an MBS execution, and paid off in December 2010.

Header Data
The system populates the fields in this section at different points in the process. At this point, the screen displays the Fannie Mae Loan Number and the Payoff Status of Draft.

 

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eServicing Data
The system displays the eServicing system data for this Fannie Mae loan number. The data includes the servicer name and number, the servicer’s loan ID, property name, mortgage loan maturity date, and data related to the cash flow on the mortgage loan. You should check this data for accuracy and notify your Fannie Mae servicing analyst if you notice any discrepancies.

 

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Common Data
The system populates this section with the data you entered on Page 1.

 

Conditional Data
The Calculator will display the total declining premium amount and require you to select a DP Split Method.

 

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Follow these steps:

  1. Choose the DP Split Method from the drop-down box. The DP Split Method depends on the product type. You usually will find this information in your Servicing Contract and in the MBS disclosure documents, if applicable.

    If the Investment Type is MBS, the split method may be either Amounts or Percentages. If the Investment Type is Cash, the split method may be No split to lender, Notional Guar Fee Rate, Amounts, or Percentages. Contact your Fannie Mae servicing analyst if you have any questions.

    • If the DP Split Method is “No split to lender,” the next three fields are grayed out.
    • If the DP Split Method is “Notional Guar Fee Rate,” enter the percent in the field labeled Notional Guaranty Fee Rate.
    • If the DP Split Method is “Amounts,” enter the dollar amounts in the fields labeled Decl Prem Due FNMA Amount, Decl Prem Due Lender Amount, and Decl Prem Due Investor Amount.
    • If the DP Split Method is “Percentages,” enter the percentages in the fields labeled Decl Prem Due FNMA Percent, Decl Prem Due Lender Percent, and Decl Prem Due Investor Percent.

  2. If the mortgage loan has an adjustable rate, you see additional fields. Complete the fields as follows:

    • Enter the date that the current ARM interest rate went into effect.
    • The Calculator populates the field labeled ARM Validated Curr Int Rate based on data in eServicing. However, you should modify the data if it is incorrect.
    • Select the ARM Rate Change Freq from the drop-down box.
    • Enter the ARM interest rate after the next change date if it is available. If the rate is not yet available, leave the field blank.

     

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  3. If the Investment Type is Cash, select the Interest Amount Calculation Method to be used in determining the amount of interest to be charged at mortgage loan payoff. You find this information in the loan documents.

  4. Complete the Comments field, if needed.

  5. If other fees are due on the mortgage loan, click Misc Fees and enter the applicable data. See Entering Miscellaneous Fees in the Payoff Calculator.

  6. When you are finished entering data, click Calculate.

    Note: If you wish to pause in your work before completing data entry, click Save instead.

    The PayOff Quote Detail Page appears.

  7. Attach the required documents, which vary with the age of the note.

    • For loans closed using the pre-2011 Fannie Mae Multifamily Form Loan Documents (Note Form 4100 series), and generally dated prior to June 1, 2011, the required documents typically include the mortgage note with Schedule A, which is referenced in the note and describes the prepayment provisions, as well as the borrower’s written notice of intent to prepay.
    • For loans closed using the 2011 Fannie Mae Multifamily Form Loan Documents (Note Form 6010), and generally dated after June 1, 2011, the required documents include the mortgage note, the loan agreement with all attached schedules, as well as the borrower’s written notice of intent to prepay.

      See Attaching Documents to a Payoff Quote for step-by-step instructions on how to attach the documents.

Checking Your Data

The system establishes a Payoff ID, which appears under the Header Data on the Payoff Quote Detail Page along with a date stamp and your name as the creator of the quote. The Payoff Status displays as Draft.

The system saves your data and generates the UPB at Payoff, Total Interest, and Total Preparyment Penalty. If you entered percentages, the Payoff Calculator also calculates the dollar amounts associated with those percentages.

 

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Follow these steps to check your data:

 

  1. Review the data on the PayOff Quote Detail Page for accuracy.

  2. Click Breakdown of Funds to view a printable pop-up window that shows the calculated values and how they are to be split. These values include UPB; pass-through interest or interest due to Fannie Mae; the servicing fee due to your organization; our guaranty fee, if applicable; and any prepayment premiums due to you as the lender, Fannie Mae, and investors; and miscellaneous fees, if any.

    Note: After Fannie Mae approves your quote, this page appears as a Confirmation Page stamped with the date and time your quote was approved by Fannie Mae.

  3. Close the window to return to the PayOff Quote Detail Page.

    Note: f you find an error in any of your entries, click Edit at the bottom of the screen. Correct any errors and click Calculate to update the data. If you believe that Fannie Mae’s data is incorrect, contact your Fannie Mae servicing analyst for assistance.

  4. Review the Waivers section to see if any waivers are required with the payoff quote. If so, contact your Fannie Mae servicing analyst for further instruction. Following is a list of potential waivers.

    • Borrower notification
    • Last day of month
    • Prepayment lockout

  5. Click Download if you would like to create an export file containing the payoff quote data for the quote you are working on.

    Note: If you are running Microsoft® Office 2003, your CSV file may open in your browser rather than in Microsoft Excel®. Follow the steps in Opening Your CSV File in Excel to adjust your Microsoft Office 2003 configuration.

Submitting Your Payoff Quote to Fannie Mae

Follow these steps when you are ready to submit your PayOff Quote to Fannie Mae:

  1. Click Change State.

    The Change Payoff State Page appears.

     

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  2. Select Submitted from the Payoff Status drop-down box and complete the Comments field.

  3. Click Update to complete your submission.

    The following message appears: “You are about to submit a payoff quote to Fannie Mae. Do you wish to proceed?”

  4. Click OK if you want to proceed. Click Cancel if you want to return to the Payoff Calculator to verify or change your quote.

    If you click OK, the View Payoff Quote Page appears and the Payoff Status changes to Submitted. The Payoff Calculator notifies the Fannie Mae servicing team that a payoff quote has been submitted.

     

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    You receive an e-mail notification from Fannie Mae when the payoff quote status changes to submitted, assigned, servicer rework, pending approval, approved, or cancelled.

  5. When you receive notification that your payoff quote has been approved, return to the Payoff Calculator to download the final Breakdown of Funds/Confirmation Page. You can print the Breakdown of Funds or save it as an Excel spreadsheet or a PDF.

    Note: You can return to the Payoff Calculator at any time to check the status of the quote you submitted. See Monitoring the Status of a Payoff Quote for more information.

 

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