LOAN MODIFICATION AGREEMENT CHANGES

Date: 15th November, 2010

In September and October of 2010, Fannie Mae released new authorized changes for their line of standard loan modification agreements, including the 3161 (Providing for Adjustable Interest Rate) and 3179 (Providing for a Fixed Interest Rate) forms.

MBS ProClose® is updating our library of loan modifications to provide you with the ability to pull documents with the options you need. The standard and MERS versions of the 3179 for all states are already in process or complete. To best prioritize other options, we need your help.

The following are the variables, which change the content of the 3161 loan modification agreement:

• If MERS either was named in the security instrument as the nominee for the lender or was a subsequent assignee of the mortgage
• If borrower previously received a Chapter 7 bankruptcy discharge but did not reaffirm the mortgage debt under applicable law

The following are the variables, which change the content of the 3179 loan modification agreement:

• If the loan modification involves an interest rate reduction and the resulting interest rate will be fixed for the first five years and thereafter increase annually to a final fixed rate
• If the loan modification involves principal deferral and the resulting interest rate is fixed for the remaining term of the loan
  
• If the loan modification involves principal deferral and the resulting interest rate will be fixed for the first five years and thereafter increase annually to a final fixed rate 
  
• If MERS either was named in the security instrument as the nominee for the lender or was a subsequent assignee of the mortgage (state versions in process or complete)
  
• If borrower previously received a Chapter 7 bankruptcy discharge but did not reaffirm the mortgage debt under applicable law
  
• If original loan documents did not include standard Fannie Mae/Freddie Mac Uniform Instrument provisions for escrow items
  
• If the security property is an investment property and is not occupied by the borrower as his or her principal residence

With such a large number of scenarios possible, it is beneficial to know the most needed modification options at this time. Please call or email your ProClose® client support representative by Friday November 19th, 2010 to let us know what type(s) of modifications you're doing, based on the variables given above.

Also, in light of these changes, you may need alternate text for any loan modifications you have in the interim before the form revisions are available. Please reference Fannie Mae's instructions for the 3161 and 3179 forms to identify the applicable changes you may need to make. Contact us any time to request a specific option and/or state be moved up in priority.

Thank you,

Compliance Department
MBS-ProClose
800-783-2283
www.ProClose.com