Master Servicing Simplification Changes
A better servicing experience is coming
What if your servicing operations were simpler, faster, and more transparent? Sweeping changes are on the horizon – designed to streamline servicing, enhance risk management, and improve efficiencies across the board. This multi-year, phased approach supports a smooth transition for servicers of all sizes. It’s not just change, it’s meaningful progress. Start preparing now to take advantage of what’s ahead.
What’s coming
Event-based reporting – Report loan-level servicing events to Fannie Mae in near real-time. Loan activity reports will go away.
Loan data expansion – With event-based reporting, share an expanded set of data attributes for servicing events.
P&I remittance for summary reporting A/A mortgage loans - Automatic Fannie Mae-initiated drafts of principal & interest (P&I) remittance for Actual/Actual (A/A) mortgage loans.
Get ready
Start preparing now with just a few simple steps:
- Check out the resources below to get familiar with what’s coming - starting with Loan Escrow reporting.
- Talk with your tech partner (if you have one) to understand how the changes might affect your current setup.
- Make a plan to compare your current data to what is required and to source any new required data.
- Get ready to build —start planning development activities.
- Understand testing requirements for the upcoming Loan Escrow testing window opening in Q2 2026.
- Stay aligned by mapping your timeline to the implementation milestones.
Contact
If you have questions about these change, contact Future of Servicing.
If you are a Technology Service Provider, access the technical specification resources in our secure environment. If you don’t have a Box account, please register. Need help with Access?
Completed
Cash Simplification Changes
We updated LL-2023-05, Advance Notice of Changes to Master Servicing Processes and Systems, to reflect that changes to reporting deadlines for summary loan payments are effective with the September 2024 loan reporting cycle.
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.
