source:
  type: guide
  id: fnma-svc-c-1.1-01
  authority: Fannie Mae Servicing Guide C-1.1-01 — Servicer Responsibilities for Processing
    Mortgage Loan Payments
  description: Fannie Mae Servicing Guide C-1.1-01 — Servicer Responsibilities for
    Processing Mortgage Loan Payments.
  coverage_tier: operative
obligations:
- id: fnma-svc-c-1.1-01-full
  canonical_id: fnma-svc-c-1.1-01-full
  section: Fannie Mae Servicing Guide C-1.1-01 — Servicer Responsibilities for Processing
    Mortgage Loan Payments
  type: do
  tags:
  - regulator-direct
  - fnma
  - servicing-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Servicing Guide C-1.1-01 — Servicer Responsibilities for
      Processing Mortgage Loan Payments
    source_class: fnma-guide
    source_url: https://singlefamily.fanniemae.com/media/document/pdf/servicing-guide
    snapshot_id: cf63a82bbb4adfba
    fetched_at: '2026-05-22T23:53:19Z'
    content_hash: sha256:89df66c43baad07f8a8dd9d224492fff7d15e8839edba02ad0e74c7e50fe5da3
    paragraph_quote: 'C-1.1-01, Servicer Responsibilities for Processing Mortgage
      Loan Payments (04/12/2023) The following table outlines the servicer’s responsibilities
      for processing payments for any mortgage loan that Fannie Mae owns or securitizes.
      ✓ The servicer must... Notify the borrower of upcoming payment changes in accordance
      with the mortgage loan documents, applicable law, or as speciﬁcally required
      by this Servicing Guide. Apply scheduled payments, including late charges (if
      applicable), in the order speciﬁed in the security instrument. Note: When multiple
      payments are received, each payment must be applied separately. Ensure payments
      for all mortgage loans are credited upon receipt and that each portion of the
      payment is accounted for in its records. Apply all funds as intended by the
      borrower, when applicable. Note: Funds intended by the borrower for ﬁrst lien
      mortgage loans must not be reallocated as payment towards any subordinate lien.
      Published May 13, 2026 206 ✓ The servicer must... Deposit all funds into a custodial
      account in a ﬁnancial institution that meets Fannie Mae’s rating requirements
      for custodial depositories (or within its own institution if it qualiﬁes) within
      24 hours of receipt. When the servicer uses a lockbox agent to collect mortgage
      payments, the payments must be deposited into the collection clearing account
      no later than the 1st business day after they are received by the lockbox agent.
      This means that the funds must be deposited into the applicable custodial account
      no later than the 2nd business day after the servicer’s lockbox agent receives
      them. Follow any speciﬁc requirements of FHA, HUD, or VA, when applicable. Follow
      any speciﬁc requirements of the SCRA, when applicable. The servicer must follow
      the procedures in F-1-19, Processing a Military Indulgence. For all mortgage
      loan modiﬁcations with a step interest rate adjustment, the servicer must send
      the borrower a notiﬁcation of the mortgage loan interest rate adjustment. All
      payment change notiﬁcations for mortgage loan modiﬁcations with a step interest
      rate adjustment must include the information shown in the following table. ✓
      Notice Requirements The amount and eﬀective date of the interest rate increase.
      The amount and due date of the borrower’s new monthly payment. An explanation
      pursuant to the terms of the modiﬁcation agreement, that at the end of the initial
      ﬁxed-rate term, the interest rate will increase according to the schedule in
      the modiﬁcation agreement until it reaches the interest rate cap. Furthermore,
      the explanation should, as applicable, include statements regarding the following:
      • how the interest rate cap was set; and • notiﬁcation that once the interest
      rate reaches the interest rate cap, it will be ﬁxed for the remaining life of
      the mortgage loan. A payment schedule table, similar to the one included in
      the modiﬁcation agreement, that outlines the future interest rates and monthly
      payment amounts (identifying P&I, and estimated escrows) and the eﬀective dates
      for such amounts, or the servicer may explain these terms, dates, and amounts.
      Published May 13, 2026 207 ✓ Notice Requirements An explanation that the monthly
      payment includes an escrow for property taxes, applicable property insurance,
      and the other escrowed expenses, which, if changed, will change the monthly
      payment. An explanation of how the new monthly payment was determined. Servicer
      contact information and instructions to the borrower to contact the servicer
      if the borrower has questions or concerns about the new monthly payment. The
      Homeowner’s HOPE™ Hotline Number (1–888–995–HOPE). An explanation that the borrower
      can seek assistance with household budgeting at no charge from HUD-approved
      housing counseling agencies that can be found on HUD.gov. Information regarding
      the availability of additional educational resources on Fannie Mae’s consumer
      website. The servicer must send notiﬁcations for all mortgage loans with step
      interest rate adjustments in compliance with the timing requirements provided
      in the following table. Type of Interest Rate Adjustment Days Prior to Change
      At a minimum, the servicer must send... Mortgage Loan Modiﬁcation Initial Step
      Interest Rate Adjustment 150 to 90 the ﬁrst written notiﬁcation detailing the
      pending change. 75 to 60 the second written notiﬁcation detailing the pending
      change. Mortgage Loan Modiﬁcation Subsequent Year Step Interest Rate Adjustments
      120 to 60 notiﬁcation detailing the pending change. The servicer must follow
      the procedures in Applying a Mortgage Loan Payment in F-1-09, Processing Mortgage
      Loan Payments and Payoﬀs for speciﬁc instructions related to this topic. Recent
      Related Announcements The table below provides references to recently issued
      Announcements that are related to this topic. Published May 13, 2026 208 Announcements
      Issue Date Announcement SVC-2023-02 April 12, 2023'
  judgment: false
