REQUIRED

The borrower will provide a written request to reduce his interest rate. The request requires:

1. Copy of orders calling them to active duty.
2. Written request stating the amount the borrower can afford to pay.

The modifications made to your data base are dependant upon who owns the loan and the type of remittance required.

1. Using the current balance and remaining term, determine the new P&I amount at the rate of 6% in Finance I (10.01), unless the borrower can only afford to pay a lesser amount.
2. Modify the Master Record as follows:

• Modify Field 20 to prevent assessing any further late charges. Enter a 0% in the second position. This will allow the servicer to send first and second notices, but no fee will be assessed. (i.e., 2-0.00-01-15).
• Modify Field 64 Current Interest Rate to be 6%.
• Modify Field 65 Current P&I to be the amount calculated in Finance I above or the lesser amount your borrower proved they could afford.
• Field 82 can be set with a Review Date six months from the activation date unless a specific date is given. This would alert you to verify the borrower is still on active duty after six months. If they are still on active duty, move the date forward another six months. Coupons will not print beyond this date.
• In Field 97, enter the date the borrower was called to active duty.
• In Field 98, enter Code 32 (Military Indulgence).
• In Field 98A, enter Reason Code 14 (Military Service).
• Enter a comment (03.23.11) indicating Military Relief in one of the first four important comments.
• Modify Field 115 to AI (Military Duty) for credit reporting.

These fields must be changed back when active duty ends.

Follow all the steps outlined for a Fixed Rate Loan, plus the following:

1. Create an Index Table in (09.09) labeled "Military Relief" with a rate of 6%.
2. Link the loan to this table by modifying Field 50 to the table number representing the 6% table.
3. Remove the Margin from Field 51.
4. Add a new line to the Payment Adjustment Table indicating the new rate and P&I.

The loan will still require that Change Notices be prepared when the Change Date is reached. When active duty ends, modify Fields 50 and 51 back to their original codes and add a line to the Payment Adjustment Table to resume the rate and payment that would have been in effect.

Fannie Mae actual/actual reporting will also change the rate on their record. Therefore, follow the same steps as with portfolio loans. If you are servicing actual/actual loans for other investors, you should check with the investor before changing the loan data.

Freddie Mac, Ginnie Mae and Fannie Mae MBS Pools follow the same steps as with portfolio loans. The investor will require remittance of the "scheduled" amounts as per the original rate and payment. Bill the investor for the difference at monthly cutoff.

The Freddie Mac ANY Rate will retain the old rate information and calculate the amount required to submit to Freddie Mac. The Freddie Mac Monthly Activity Report (03.17.10.02.07) indicates the difference between what was collected and what is required to submit. Use Freddie’s forms 1066 and 1071 to request reimbursement.

The Pool package Pass Through Rate will retain the old rate information even though the rate is changed in the Loan Servicing Master Record. Use the 1710A Report to determine the difference between the amount collected and the amount due to the investor. This is the amount to request for reimbursement.

When the military indulgence ends, change all fields back to their original information.