Recently added disclosure field provides insight into servicing activity

November 28, 2016


Last month, Fannie Mae released several new data elements for its Connecticut Avenue Securities™ (CAS) program. Beginning with data files released on October 25, 2016, among other elements, we began to disclose the “servicing activity indicator” data field. The servicing activity indicator was designed in response to investor feedback and identifies a change in servicing activity during the corresponding reporting period. The servicing activity indicator field will be populated with “Y” to indicate that a transfer in primary or sub-servicing has occurred. Not all mortgage loans identified with this indicator require specific action on the part of the respective borrower or co-borrower.


Subsequent to the delivery of mortgage loans to Fannie Mae, servicers may transfer servicing activities to other Fannie Mae approved servicers. In addition, servicers may transfer servicing to or from sub-servicers. Investors and other market participants may be able to derive greater insights from servicing and sub-servicing transfer activity about reported loan performance. In particular, servicing transfers occasionally may impact the occurrence of reported 30-day delinquencies. There is sometimes an increase in reported 30-day delinquencies in the months before, during, and immediately following a servicing transfer as there may be delays or other timing issues with a borrower’s receipt of notifications from their new servicer and/or completion of the operational process of transferring the payment collection activities, even if the borrower did submit a timely monthly payment.

Fannie Mae’s at-issuance and monthly CAS disclosures identify servicer names when the UPB of loans serviced by an individual servicer constitutes 1% or more of total At Issuance reference pool UPB. All other servicers, with less than a 1% representation, are identified as “Other” in the servicer field. In addition our monthly CAS disclosures do not identify any sub-servicers and, prior to our introduction of the servicing activity indicator, did not report on sub-servicing transfer activity. As a result, servicing transfers that occur among smaller servicers may not be identifiable via changes in the servicer field and any sub-servicing transfer activity are not identifiable via changes in the servicer field. The servicing activity indicator provides identification of changes to the primary servicer and/or sub-servicing arrangements for the loans in each CAS reference pool. Note that there are situations in which a loan’s delinquency status may be impacted by a servicer moving its systems and operations from one servicing platform to another servicing platform, even if the borrower did submit a timely monthly payment. In these types of situations, the servicing activity indicator will not identify these types of changes.

Demonstrating the servicing activity indicator

The servicing activity indicator can be used for analysis beginning with the remittance files published in October of 2016. For example, market participants can compare loans that are newly reported as 30 days delinquent with loans noted as having servicing activities during the same period to determine if any increase in reported delinquencies may be correlated with servicing transfers. To illustrate, the chart below compares newly reported 30 day delinquencies with loans identified as having a servicing activity during the August and September reporting periods (remittance files posted in October and November of 2016, respectively):

(by loan count)



Loans experiencing a new 30-day delinquency during the reporting month



Loans experiencing a new 30-day delinquency during the reporting month that are also identified as having a servicing activity indicator of Y



The chart illustrates that out of the 8,759 loans experiencing a new 30-day delinquency in September, 2,230 of those loans were also identified as having a servicing activity indicator of “Y”. A market participant can monitor the subsequent performance of those loans to gain a better understanding of the impact that servicing transfer activities may have on reported delinquencies.

To read about the additional data enhancements that were introduced beginning with the October 2016 monthly data files, please reference our recent announcement.

Please contact the Fannie Mae Investor Help Line at 1-800-2FANNIE, Option 2, or by e-mail with any questions.