MPF Announcement 2024-49

MPF Xtra Servicing – Updates to Determining the Flex Modification Terms

Effective Date: Immediately (unless otherwise noted)

Fannie Mae published Lender Letter LL-2024-02, updating the steps for determining the Fannie Mae Flex Modification terms in alignment with Freddie Mac and at the direction of FHFA.

The updates expand eligibility by revising the mark-to market loan-to-value (MTMLTV) based requirements and provide more equitable payment reduction to eligible borrowers by applying the terms incrementally and targeting a 20% P&I payment reduction.

The Lender Letter contains updates to the Fannie Mae Flex Modification terms and the Appendix.

Effective Date: Servicers may determine the borrower’s new modified mortgage loan terms for a Fannie Mae Flex Modification in accordance with this Lender Letter as early as November 1, 2024, but are required to do so no later than December 1, 2024. Once implemented, Servicers must offer the Fannie Mae Flex Modification to all eligible borrowers according to the requirements in the Lender Letter.

These policy changes will be reflected in a November Servicing Guide update.

To gain a full understanding of these topics, PFIs should review the entire Fannie Mae Lender Letter plus any applicable Fannie Mae Servicing Guide chapters, forms, or exhibits noted in the announcement.

References:: MPF Announcement 2024-49

MPF Xtra Servicing – Updates to Determining the Flex Modification Terms

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