Servicers: Fannie Mae replatforming some workout functions

Fannie Mae has announced plans to discontinue use of a platform used to handle certain distressed mortgage processes and is directing mortgage professionals using it to take certain steps in response.

Servicers must leave the HomeSaver Solutions Network, which is utilized for loan workout reporting functions, and transition to a broader platform Fannie provides to handle default management before a deadline later this year.

Why Fannie Mae is ending use of HomeSaver Solutions Network

Fannie's discontinued use of HSSN is in line with far-reaching efficiency reviews at the government-sponsored enterprise at the direction of its regulator, Federal Housing Finance Agency Director Bill Pulte, and the Trump administration's broader aims.

"As a part of our commitment to streamlining servicing, HSSN loss mitigation workout reporting functionality will transition to Fannie Mae's Servicing Management Default Underwriter platform," the GSE said in a servicing notice. "All workout reporting activities will be managed by SMDU."

Pulte said earlier this month in one of his social-media posts that reforming automation at Fannie and its competitor is a priority for him as their regulator and conservator.

"So much money has been WASTED at Fannie Mae and Freddie Mac in the last four years on so called 'technology,'" Pulte said in an X post in which he also pledged to do "a full review" of their automation spending and realign automation so that its use is more efficient and effective.

Under Pulte, the FHFA also has shown interest in making distressed mortgage servicing more efficient, recently directing Fannie to end a strategy used to manage foreclosure properties based on what the agency found to be financial and operational drawbacks.

Why this is the second attempt to transition away from the network

Fannie Mae had originally planned to have mortgage professionals transition away from HSSN by the end of 2020, but the enterprise postponed the move in May of that year due to feedback from servicers during the pandemic.

Fannie said it has wanted to move away from HSSN and use the broader default management system because the latter has better policy alignment.

"SMDU offers much more for your workout reporting needs. It not only allows you to report a workout to Fannie Mae (same as HSSN), but it also follows Fannie Mae's servicing guide regarding workout eligibility and workout case structuring (unlike HSSN)," the GSE said.

Action items for servicers still using HSSN

Several functions related to loss mitigation for distressed mortgages will no longer be available through the network later this year, so servicers who haven't already stopped using it must move to SMDU by then, if not sooner.

The following functions will no longer be available through the network starting on Dec. 1.

• Creating, submitting, updating, or closing loan mod-cases, including reporting associated with trial period plan payments
• Submitting or creating cases for a deed-in-lieu of foreclosure, short sale, chargeoff, second-lien consideration or other workout option
• Closing any approved cases
• Canceling any loan modification cases
• Entering a trial period data request 
• Viewing previously generated letters related to a workout case
• Uploading documents that are part of a workout case
  

Also users will generally no longer be able to query workout case details through the HSSN.
However, some information such as delinquency status, reclass transactions and reports will still be available through Fannie's Asset Management Network where HSSN has resided. (HSSN is a series of links within AMN.)