FNMA Servicing Guide D2-3.1 — Determining the Appropriate Workout Option / Conditions for MBS Pool Modification / Group Home Servicing

fnma-svc-d2-3-1

FNMA Servicing Guide D2-3.1-02 and D2-3.1-03 govern operational rules for workout options on MBS-pool mortgage loans and group home mortgage loans: no-modify-while-in-MBS-pool rule, 4- consecutive-month delinquency precondition for special-servicing MBS removal, Trial Period Plan payment precondition for modification implementation, modification-effective-only-after- MBS-removal rule, and group-home foreclosure-prevention duty requiring work with the funding agency. Fills FNMA Servicing D2- 3.1 chapter gap.

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source:
  type: regulation
  id: fnma-svc-d2-3-1
  authority: FNMA Servicing Guide D2-3.1 — Determining the Appropriate Workout Option / Conditions for MBS Pool Modification / Group Home Servicing
  description: |
    FNMA Servicing Guide D2-3.1-02 and D2-3.1-03 govern operational
    rules for workout options on MBS-pool mortgage loans and group
    home mortgage loans: no-modify-while-in-MBS-pool rule, 4-
    consecutive-month delinquency precondition for special-servicing
    MBS removal, Trial Period Plan payment precondition for
    modification implementation, modification-effective-only-after-
    MBS-removal rule, and group-home foreclosure-prevention duty
    requiring work with the funding agency. Fills FNMA Servicing D2-
    3.1 chapter gap.
obligations:
  - id: fnma-svc-d2-3-1-02-no-modify-while-in-mbs-pool
    canonical_id: fnma-svc-d2-3-1-02-no-modify-while-in-mbs-pool
    section: FNMA Servicing Guide D2-3.1-02 — No mortgage modification while loan is in an MBS pool
    description: |
      [LENDER] (servicer) shall NOT modify a mortgage loan while it is
      in an MBS pool (including PFP mortgage loans). Performing MBS
      mortgage loans are ineligible for purchase from the related MBS
      pool for the purpose of modifying the mortgage loan term,
      interest rate, UPB, or other major characteristics. The MBS-
      structural constraint prevents pool-level investor interest
      dilution via loan-level modifications.
    type: refrain
    audit_question: For every FNMA-MBS mortgage loan modification [LENDER] executed, can [LENDER] evidence that the loan was REMOVED from the MBS pool before the modification was executed?
    program_review: Does the program ensure no MBS loan is modified while in the pool — performing MBS loans are ineligible for pool purchase to modify term/rate/UPB/major characteristics?
    file_review: For MBS-loan modifications, confirm the loan was removed from the MBS pool before the modification was executed.
    judgment: false
    feeds:
      - fnma-svc-d2-3-1-02-modification-not-effective-while-in-pool
    workflow_phase: loss_mitigation
    owner_role: loss_mitigation_specialist
    secondary_owner_role: investor_reporting_manager
    cadence: per-mbs-modification
    consequence: Modification of an in-pool MBS mortgage loan is a foundational MBS-structural breach; may trigger pool-level investor claims and FNMA enforcement.
    tags:
      - round-d
      - regulator-direct
      - fnma
      - servicer-operations
      - mbs-pool
      - no-modify-in-pool
      - loan-modification
      - promoted
    primary_source:
      tier: 1
      authority: FNMA Servicing Guide D2-3.1-02 — Conditions of MBS Mortgage Loan Modification
      source_class: fnma-guide
      source_url: https://singlefamily.fanniemae.com/media/document/pdf/servicing-guide
      snapshot_id: f662f911b3ddaf1d
      fetched_at: '2026-05-25T14:09:40Z'
      content_hash: sha256:89df66c43baad07f8a8dd9d224492fff7d15e8839edba02ad0e74c7e50fe5da3
      paragraph_quote: |
        The servicer must not modify a mortgage loan while it is in an MBS pool
      drafter_attestation: |
        Copied verbatim from snapshot f662f911b3ddaf1d. D2-3.1-02 no-modify-
        while-in-MBS-pool operative restriction. "(including PFP mortgage
        loans)" parenthetical and Performing-MBS-loan-ineligibility
        sentence paraphrased in description.
    audit_function: null
    promoted_at: '2026-05-25T20:13:09+00:00'
    promoted_from: fnma-svc-d2-3-1-roundd-v1.yaml
  - id: fnma-svc-d2-3-1-02-mbs-removal-4-consecutive-month-delinquency
    canonical_id: fnma-svc-d2-3-1-02-mbs-removal-4-consecutive-month-delinquency
    section: FNMA Servicing Guide D2-3.1-02 — 4-consecutive-month delinquency precondition for special-servicing MBS removal
    description: |
      [LENDER] (servicer) may remove a special-servicing-option
      mortgage loan from its MBS pool for modification only if the
      mortgage loan has been in a continuous state of delinquency for
      four consecutive monthly payment due dates (or at least eight
      consecutive payment due dates in the case of a biweekly mortgage
      loan) without a full cure of the delinquency during that period.
      The bright-line delinquency-duration threshold prevents premature
      pool removal.
    type: do
    audit_question: For every special-servicing-option MBS loan [LENDER] removed from its pool for modification, can [LENDER] evidence (a) 4 consecutive monthly delinquency due dates (or 8 biweekly) and (b) no full cure during that period?
    program_review: Does the program ensure a special-servicing-option MBS loan is removed for modification only after four consecutive monthly delinquent due dates (or eight consecutive biweekly) without a full cure during that period?
    file_review: For special-servicing MBS removals, confirm the 4-consecutive-monthly (or 8-biweekly) delinquency and no full cure during the period.
    judgment: false
    feeds: []
    workflow_phase: loss_mitigation
    owner_role: investor_reporting_manager
    secondary_owner_role: loss_mitigation_specialist
    cadence: per-mbs-removal
    consequence: Pool removal without the 4-consecutive-delinquency precondition is a FNMA Servicing Guide breach.
    tags:
      - round-d
      - regulator-direct
      - fnma
      - servicer-operations
      - mbs-pool
      - special-servicing-option
      - 4-month-delinquency-threshold
      - promoted
    primary_source:
      tier: 1
      authority: FNMA Servicing Guide D2-3.1-02 — Conditions of MBS Mortgage Loan Modification
      source_class: fnma-guide
      source_url: https://singlefamily.fanniemae.com/media/document/pdf/servicing-guide
      snapshot_id: f662f911b3ddaf1d
      fetched_at: '2026-05-25T14:09:40Z'
      content_hash: sha256:89df66c43baad07f8a8dd9d224492fff7d15e8839edba02ad0e74c7e50fe5da3
      paragraph_quote: |
        if a special servicing option mortgage loan has been in a continuous state of delinquency for four consecutive monthly payment due dates
      drafter_attestation: |
        Copied verbatim from snapshot f662f911b3ddaf1d. D2-3.1-02 4-
        consecutive-month-delinquency operative precondition. Biweekly-
        loan-8-consecutive-due-dates carve-out and no-cure tail paraphrased
        in description.
    promoted_at: '2026-05-25T20:13:09+00:00'
    promoted_from: fnma-svc-d2-3-1-roundd-v1.yaml
  - id: fnma-svc-d2-3-1-02-trial-period-payments-precondition
    canonical_id: fnma-svc-d2-3-1-02-trial-period-payments-precondition
    section: FNMA Servicing Guide D2-3.1-02 — Modification not implemented if Trial Period Plan payments not made
    description: |
      [LENDER] (servicer) shall ensure that the mortgage loan
      modification is NOT implemented if the required Trial Period
      Plan payments are not made in accordance with the applicable
      mortgage loan modification workout option, because the
      preconditions to make the modification effective have not been
      satisfied. The Trial Period Plan payment record is the operative
      gate for permanent modification.
    type: refrain
    audit_question: For every mortgage loan modification [LENDER] implemented, can [LENDER] evidence that all required Trial Period Plan payments were made per the workout-option terms before modification documents were executed?
    program_review: Does the program ensure a modification is not implemented unless the required Trial Period Plan payments were made per the workout-option terms?
    file_review: For implemented modifications, confirm all required Trial Period Plan payments were made before modification documents were executed.
    judgment: false
    feeds: []
    workflow_phase: loss_mitigation
    owner_role: loss_mitigation_specialist
    secondary_owner_role: compliance_officer
    cadence: per-modification
    consequence: Implementing a modification on a borrower who did not complete Trial Period Plan payments is a FNMA Servicing Guide breach.
    tags:
      - round-d
      - regulator-direct
      - fnma
      - servicer-operations
      - trial-period-plan
      - modification-precondition
      - promoted
    primary_source:
      tier: 1
      authority: FNMA Servicing Guide D2-3.1-02 — Conditions of MBS Mortgage Loan Modification
      source_class: fnma-guide
      source_url: https://singlefamily.fanniemae.com/media/document/pdf/servicing-guide
      snapshot_id: f662f911b3ddaf1d
      fetched_at: '2026-05-25T14:09:40Z'
      content_hash: sha256:89df66c43baad07f8a8dd9d224492fff7d15e8839edba02ad0e74c7e50fe5da3
      paragraph_quote: |
        The servicer must ensure that the mortgage loan modiﬁcation is not implemented if the required Trial Period Plan payments are not made
      drafter_attestation: |
        Copied verbatim from snapshot f662f911b3ddaf1d. D2-3.1-02 Trial-
        Period-payments-precondition operative requirement. Quote uses
        U+FB01 fi-ligature in "modiﬁcation" matching PDF extraction. The
        "preconditions to make the modification eﬀective have not been
        satisﬁed" tail paraphrased in description.
    promoted_at: '2026-05-25T20:13:09+00:00'
    promoted_from: fnma-svc-d2-3-1-roundd-v1.yaml
  - id: fnma-svc-d2-3-1-02-modification-not-effective-while-in-pool
    canonical_id: fnma-svc-d2-3-1-02-modification-not-effective-while-in-pool
    section: FNMA Servicing Guide D2-3.1-02 — Mortgage loan modification not effective while in MBS pool
    description: |
      [LENDER] (servicer) shall ensure that a mortgage loan
      modification does NOT become effective while it remains in an
      MBS pool. The modification agreement must be executed after the
      mortgage loan has been removed from any MBS pool and reclassified
      as a Fannie Mae portfolio mortgage loan, and must reflect the
      actual date of [LENDER]'s execution.
    type: refrain
    audit_question: For every mortgage loan modification, can [LENDER] evidence (a) the loan was removed from any MBS pool and reclassified as a portfolio loan BEFORE the modification agreement was executed, and (b) the agreement reflects the actual execution date?
    program_review: Does the program ensure a modification does not become effective while the loan is in an MBS pool — the agreement is executed after pool removal/reclassification to portfolio and reflects the actual execution date?
    file_review: For modifications, confirm the loan was removed from any MBS pool and reclassified as portfolio before the agreement was executed, and that the agreement reflects the actual execution date.
    judgment: false
    feeds: []
    workflow_phase: loss_mitigation
    owner_role: investor_reporting_manager
    secondary_owner_role: loss_mitigation_specialist
    cadence: per-modification
    consequence: Effecting a modification while loan is still in an MBS pool is a foundational MBS-structural breach.
    tags:
      - round-d
      - regulator-direct
      - fnma
      - servicer-operations
      - mbs-pool
      - modification-effective-date
      - portfolio-reclassification
      - promoted
    primary_source:
      tier: 1
      authority: FNMA Servicing Guide D2-3.1-02 — Conditions of MBS Mortgage Loan Modification
      source_class: fnma-guide
      source_url: https://singlefamily.fanniemae.com/media/document/pdf/servicing-guide
      snapshot_id: f662f911b3ddaf1d
      fetched_at: '2026-05-25T14:09:40Z'
      content_hash: sha256:89df66c43baad07f8a8dd9d224492fff7d15e8839edba02ad0e74c7e50fe5da3
      paragraph_quote: |
        The servicer must ensure that a mortgage loan modiﬁcation does not become eﬀective while it remains in an MBS pool.
      drafter_attestation: |
        Copied verbatim from snapshot f662f911b3ddaf1d. D2-3.1-02
        modification-not-effective-while-in-pool operative restriction.
        Quote uses U+FB01 fi-ligature in "modiﬁcation" and U+FB00 ff-
        ligature in "eﬀective" matching PDF extraction. The post-removal/
        reclassification execution rule paraphrased in description.
    promoted_at: '2026-05-25T20:13:09+00:00'
    promoted_from: fnma-svc-d2-3-1-roundd-v1.yaml
  - id: fnma-svc-d2-3-1-03-group-home-work-with-funding-agency
    canonical_id: fnma-svc-d2-3-1-03-group-home-work-with-funding-agency
    section: 'FNMA Servicing Guide D2-3.1-03 — Group home delinquency: work with funding agency to resolve'
    description: |
      For mortgage loans where the property securing the mortgage loan
      serves as a group home, [LENDER] (servicer) shall work with the
      borrower AND the funding agency to resolve a serious delinquency.
      [LENDER] shall devote additional resources to foreclosure
      prevention efforts when the group home is still occupied by
      disabled tenants and, if appropriate, delay the initiation of
      foreclosure. The group-home rule recognizes the vulnerable-
      population housing-protection context.
    type: do
    audit_question: For every group-home mortgage loan delinquency, can [LENDER] evidence (a) outreach to BOTH the borrower and the funding agency, (b) additional foreclosure-prevention resources devoted, and (c) any foreclosure-initiation delays when disabled tenants still occupy?
    program_review: Does the program account for group-home loans — working with both the borrower AND the funding agency on serious delinquency, devoting additional foreclosure-prevention resources, and delaying foreclosure where appropriate while disabled tenants occupy?
    file_review: For group-home delinquencies, confirm outreach to borrower and funding agency, additional foreclosure-prevention resources, and any foreclosure-initiation delay while disabled tenants occupy. The compliance person judges whether the heightened effort was adequate.
    judgment: true
    feeds: []
    workflow_phase: loss_mitigation
    owner_role: loss_mitigation_specialist
    secondary_owner_role: compliance_officer
    cadence: per-group-home-delinquency
    consequence: Standard-track foreclosure on a group home with disabled occupants creates fair-housing and FNMA-program-specific exposure.
    tags:
      - round-d
      - regulator-direct
      - fnma
      - servicer-operations
      - group-home
      - vulnerable-occupant
      - foreclosure-prevention
      - promoted
    primary_source:
      tier: 1
      authority: FNMA Servicing Guide D2-3.1-03 — Working with a Borrower that has a Group Home Mortgage Loan
      source_class: fnma-guide
      source_url: https://singlefamily.fanniemae.com/media/document/pdf/servicing-guide
      snapshot_id: f662f911b3ddaf1d
      fetched_at: '2026-05-25T14:09:40Z'
      content_hash: sha256:89df66c43baad07f8a8dd9d224492fff7d15e8839edba02ad0e74c7e50fe5da3
      paragraph_quote: |
        must work with the borrower and the funding agency to resolve a serious delinquency
      drafter_attestation: |
        Copied verbatim from snapshot f662f911b3ddaf1d. D2-3.1-03 group-
        home-work-with-funding-agency operative requirement. The
        additional-resources / foreclosure-delay tail paraphrased in
        description.
    promoted_at: '2026-05-25T20:13:09+00:00'
    promoted_from: fnma-svc-d2-3-1-roundd-v1.yaml
_promotion_history:
  - promoted_at: '2026-05-25T20:13:09+00:00'
    candidate_path: obligations\_remediation\round-d-investor-guides\fnma-svc-d2-3-1-roundd-v1.yaml
    candidates_promoted: 5
    candidates_skipped_existing: 0

Verbatim regulatory text (5)

Verbatim provisions from FNMA Servicing Guide D2-3.1 — Determining the Appropriate Workout Option / Conditions for MBS Pool Modification / Group Home Servicing — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.

FNMA Servicing Guide D2-3.1-02 — No mortgage modification while loan is in an MBS pool

The servicer must not modify a mortgage loan while it is in an MBS pool

Source: FNMA Servicing Guide D2-3.1-02 — Conditions of MBS Mortgage Loan Modification · source URL · snapshot f662f911b3ddaf1d

FNMA Servicing Guide D2-3.1-02 — 4-consecutive-month delinquency precondition for special-servicing MBS removal

if a special servicing option mortgage loan has been in a continuous state of delinquency for four consecutive monthly payment due dates

Source: FNMA Servicing Guide D2-3.1-02 — Conditions of MBS Mortgage Loan Modification · source URL · snapshot f662f911b3ddaf1d

FNMA Servicing Guide D2-3.1-02 — Modification not implemented if Trial Period Plan payments not made

The servicer must ensure that the mortgage loan modiﬁcation is not implemented if the required Trial Period Plan payments are not made

Source: FNMA Servicing Guide D2-3.1-02 — Conditions of MBS Mortgage Loan Modification · source URL · snapshot f662f911b3ddaf1d

FNMA Servicing Guide D2-3.1-02 — Mortgage loan modification not effective while in MBS pool

The servicer must ensure that a mortgage loan modiﬁcation does not become eﬀective while it remains in an MBS pool.

Source: FNMA Servicing Guide D2-3.1-02 — Conditions of MBS Mortgage Loan Modification · source URL · snapshot f662f911b3ddaf1d

FNMA Servicing Guide D2-3.1-03 — Group home delinquency: work with funding agency to resolve

must work with the borrower and the funding agency to resolve a serious delinquency

Source: FNMA Servicing Guide D2-3.1-03 — Working with a Borrower that has a Group Home Mortgage Loan · source URL · snapshot f662f911b3ddaf1d