MPF® Traditional Training:Specialized Loan Servicing

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Selling & Delivery

Closing

It’s the big day for your borrower!

It’s also an important milestone for your institution, as this is the final step before selling the loan to MPF®. During this stage, we will cover the specific steps you will need to complete to close your loan.

Your Responsibilities

  1. Meet SLS requirements. 

    • Review the SLS Whole Loan Servicing Transfer Manual (Traditional) for servicer specific requirements.
    • Collect the SLS fees:
      • Tax Service Fee: $80.00
      • Conventional Loan Boarding Fee: $150.00
      • Government Loan Boarding Fee: $500.00
      • When escrows are waived, there will be an SRP adjustment. 
    • Provide borrower with the Notice of Servicing Transfer (Exhibit 4 of the SLS Whole Loan Transfer Servicing Manual) or equivalent document at closing or as required by RESPA and other applicable laws. This document must include an accurate effective servicing transfer date.
    • Pay all taxes, delinquent taxes or insurance payments due within 60 days before or after the sale date.
    • Complete the Tax Information Sheet (Exhibit 8 of the SLS Whole Loan Transfer Servicing Manual). 
    • SLS Funding requires you to be a MERS member. Refer to the SLS Whole Loan Servicing Transfer Manual (Traditional) for more information.

    • Tip: Closer/funder/post-closer responsibilities vary from PFI to PFI; you will need to determine where the responsibility for SLS forms falls within your institution.

  2. Proceed with your normal closing procedures.

    • Meet all federal and state regulations.
    • Prepare the closing documents.
      • The loan will close in your institution’s name.
      • MPF does not require any program specific forms.
    • Be sure to use only the most current standard Fannie Mae/Freddie Mac uniform instruments.
      • Use the Multi-state Fixed Rate Note FNMA/FHLMC 3200.
        • Must use 5% late charge after 15 days (OG-12) unless state law states differently.
        • MPF prohibits prepayment penalties on the first lien and any subordinate liens for conventional and government mortgages.
      • Use the FNMA/FHLMC state-specific Mortgage or Deed of Trust based on state requirements.
        • You may use a MOM mortgage or Assignment to MERS.
      • Use the following FNMA/FHLMC riders if applicable:
        • Multiple units require the use of 1-4 Family Rider (FNMA 3170)
        • PUD Rider (FNMA 3150)
        • Condo Rider (FNMA 3140) 
        • Second Home Rider (FNMA 3890)

    • Tip: If tax transcripts were not obtained for the underwriting decision, the borrower(s) must sign a 4506C at closing. 

  3. Close with the borrower(s).

    • Serviced loans purchased ON or BEFORE the 12th day of the month
      • First borrower payment due to SLS - 1st day of the next month
      • Effective date of servicing transfer - 1st day of the next month
         
    • Serviced loans purchased AFTER the 12th day of the month
      • First borrower payment due to SLS - 1st day of the month after the next month
      • Effective date of servicing transfer - 1st day of the month after the next month

Examples:

Tip: Example Closing Scenarios

SLS's Responsibilities

  1. The SRP will be paid to you by SLS. 

    • SLS will net the required escrow balance and fees from the SRP. If netting results in a negative SRP, you will be required to wire the required funds within 2 business days. See Selling tab for more information.