Master Servicing Simplification Changes

Delivering simple, streamlined solutions to servicers

Fannie Mae is making policy and operational changes to Master Servicing processes and systems. These tools are designed to help you prepare and seamlessly implement these required changes.

Cash Simplification Changes

Per LL-2023-05, Advance Notice of Changes to Master Servicing Processes and Systems, additional changes further simplify and streamline servicer reporting and will be introduced in a phased approach.


Streamline investor reporting with LSDU self-serve capabilities

Streamline Investor Reporting with LSDU Self-serve Capabilities will retire SURF™ ,  make changes to reporting due date for summary reporting loans, and expand the LAR 96 format.

Guaranty fee relief after four months delinquency

Per LL 2021-12, for Scheduled/Scheduled remittance type mortgage loans where we bear the foreclosure loss risk, in the Loan Reporting Cycle that an Scheduled/Scheduled MBS mortgage loan becomes 120 or more days delinquent, Fannie Mae will place the mortgage loan in the Stop Delinquency Advance process.

Elimination of advance payment of UPB at foreclosure

Per Lender Letter LL-2021-12, effective Sept. 2021, the requirement for servicers to advance payment of outstanding scheduled UPB upon completion of the foreclosure for all Scheduled/Scheduled remittance type mortgage loans for which Fannie Mae bears the foreclosure loss risk, or which are shared risk with us being responsible for marketing the property has been eliminated.

Reimbursement of gross servicing fee and guaranty fee for mortgage loans with a payment deferral

Per Lender Letter LL-2021-12, effective Sept. 2021, servicers will be able to obtain advance notice of the reimbursable amounts by utilizing Fannie Mae Connect™ or the Loan Servicing Data Utility (LSDU) application.

24 Month Delinquent Loan Reclassification

Per Lender Letter LL-2020-13, effective Jan. 2021, Fannie Mae changed the trigger for automatic reclassification from four consecutive months delinquent to 24 consecutive months delinquent (measured by LPI date). These changes became effective for mortgage loans that become greater than four consecutive months delinquent on or after Feb. 2021 remittance activity (based on Jan. 2021 reporting activity). 

P&I Advance Changes

Per Lender Letter LL-2020-08, effective Aug. 2020,  Fannie Mae discontinued servicer advances of scheduled remittances of principal and interest (P&I) payments for delinquent Scheduled/Scheduled remittance type mortgage loans (delinquency advances) after four consecutive missed monthly payments for mortgage loans serviced under the special servicing option.

2020 Cash Simplification Changes

Per Lender Letter LL-2019-07, effective Aug. 2020, Fannie Mae made policy and operational changes to simplify and streamline the Fannie Mae cash remittance and reconciliation processes.  These changes reduced touch points and eliminated manual operations for remitting Principal and Interest (P&I) for Scheduled/Scheduled and Scheduled/Actual portfolio loans.