Pursuant to a recent case in Pennsylvania (EMC Mortg., LLC v. Biddle, 114 A.3d 1057 (2015)), only provisions that clearly indicate that a term or clause in an agreement will remain operative after a judgement is obtained will survive merger into a foreclosure. Consequently, a specific “Survival Events” clause must be added to the Mortgage, and a section about the effect of the Survival Events must also be incorporated into the Note. The provisions that will be added include funds for escrow items, taxes, assessments, charges, fines, impositions, property insurance, costs of repairs and maintenance, mortgage insurance, attorney’s fees, costs of foreclosure. Reference to the changes can be found on the FNMA Security Instrument and Notes websites.
- PA Security Instrument – https://www.fanniemae.com/singlefamily/security-instruments
- PA Note – https://www.fanniemae.com/singlefamily/notes
As a result of these changes, we will be modifying our Notes and Security Instruments, beginning with our standard FNMA forms. The first set of Notes and Security Instruments to be changed will include:
- PA Mortgage (Cx347)
- 3200 Note Fixed (Cx5)
- VA 3200 Note Fixed (Cx58)
- 3501/3502 Note ARM 1/1 3/1 1 Yr Treasury (Cx142)
- 3526 Note ARM 1 Yr WSJ LIBOR (Cx192)
- 3528 Note ARM 5/1, 7/1, 10/1 Yr WSJ LIBOR (Cx203)
- 3271 Interest-Only Note Fixed Note (Cx299)
- 3530 Interest-Only Note ARM 1 Yr WSJ LIBOR (Cx828)
- 3501 – 1 YR Treasury – Modified for VA ARM (Cx3148)
- 3535 Multi 1 Yr LIBOR Ten-Year Interest Only Note (Cx6124)
The first set of FNMA Note and Security Instrument changes will be implemented on June 2, 2016, with the changes to other Notes and Security Instruments being pushed out as they are completed. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
DR 196839