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Freddie Mac’s Imminent Default Indicator™ (IDI) – Frequently Asked

Questions
Updated October 2010
Select a question or Category (below) to skip to that question or section.

Top 10
1. What is the effective date for servicers to implement IDI?
2. Where is the File Transfer Portal (FTP) located?
3. What values can servicers enter in the Monthly Debt Payment-to-Income Ratio field, #31?
4. What value should servicers put into the IDI Monthly Debt Payment-to-Income Ratio field, #31, if the only
source of income is unemployment or if the borrower has no income?
5. What should servicers do if they receive an error message? Do servicers need to fix the error and resubmit?
6. How should servicers determine the cause for an error and how to resolve the error?
7. If a servicer receives a score of “2” or “not in danger of imminent default” from IDI, is the loan not considered
in imminent default?
8. What denial reason should servicers use for borrowers whose mortgage loan is not characterized as “at risk
of imminent default” due to receiving a score of “2” from IDI where the borrower does not meet one of the
acceptable hardship situations identified in Announcement SVC-2010-02?
9. How should servicers verify assets? Should servicers accept the bank/investment account statements that
borrowers provide?
10. Where is the IDI job aid located on eFannieMae.com?

Category
Effective Date
Eligibility
Income Documentation and Commencement of Trial Period
Accessing IDI
Submitting to IDI
IDI Errors
General Policy

Complete List of Questions by Category

Effective Date
1. What is the effective date for servicers to implement IDI?

Eligibility
1. What are cash reserves?

© 2010 Fannie Mae. Trademarks of Fannie Mae. Imminent Default Indicator is a trademark of Freddie Mac. 10/10
2. Do cash reserves include 401K funds?
3. Is a variable annuity considered a liquid asset?
4. How should servicers verify assets? May servicers accept whatever bank/investment account statements
the borrowers provide?
5. Are loans that are not past due (less than 30 days) to be submitted to IDI as well?
6. If the IDI result is "1," should the servicer automatically proceed with the Home Affordable Modification
Program (HAMP)?
7. If the borrower states they have an auto payment on the Request for Modification and Affidavit (RMA), but
the credit report or supplied documentation does not reflect an auto payment, should the servicer use this
payment as part of the debt payment-to-income ratio calculation? Does the servicer need to obtain proof of
this payment?
8. Can servicers use the borrower financial information form for files that were received prior to March 1, 2010,
but have not yet been reviewed for eligibility? Or should they go back and request the RMA?
9. If a case has been received by the servicer prior to March 1, 2010, but not evaluated for eligibility, should
the servicer follow the IDI guidelines (SVC-2010-02) or the imminent default screen set forth in
Announcement 09-05R?
10. Are borrowers that are greater than 60 days delinquent or have cash reserves greater than $25,000.00
eligible for IDI?
11. Is IDI for those borrowers whose cash reserves total $25,000.00 or more?

Income Documentation and Commencement of the Trial Period


1. If servicers do not have the borrower's current financial information, can they put a loan through IDI?
2. Does IDI determine if the trial period length should be three months or four months?

Accessing IDI
1. Where is the IDI job aid located on eFannieMae.com?
2. Where is the File Transfer Portal (FTP) located on eFannieMae.com?
3. Has the servicer registration process been changed in any way for IDI? If someone is signing up now for
HomeSaver Solutions® Network (HSSN) and IDI, is it one process?
4. Is there a way to regenerate the output file?
5. Is there a historical table to view data that was already submitted?
6. Is the history file listed by seller/servicer ID or branch ID?

Submitting to IDI
1. If a servicer enters an incorrect value or leaves an optional field blank, will it impact the IDI result?
2. Do the .csv file names require specific characters?
3. Can servicers see the calculations behind the model?
4. Can servicers use Fannie Mae's example spreadsheet template to upload data, or are servicers required to
create their own spreadsheet?
5. Is there another way to submit a file to IDI outside the interface using FTP protocols?
6. When must a servicer use IDI?
7. Can a loan be resubmitted multiple times?
8. Does IDI maintain a report of how often a file was submitted?
9. How do servicers receive replies to a bulk file that was sent to IDI? Do servicers receive one e-mail with
multiple answers or multiple e-mails in response to a bulk file?
10. What values can servicers enter in the monthly debt payment-to-income ratio field, #31?
11. What value should be put into the monthly debt payment-to-income ratio field, if the only source of income is
unemployment?

© 2010 Fannie Mae. Trademarks of Fannie Mae. Imminent Default Indicator is a trademark of Freddie Mac. 10/10
12. What do servicers do if their seller/servicer ID is not in the drop-down box in IDI?
13. Is an AVM necessary to complete field “AK,” estimated property value?
14. Is there a test environment for IDI? Is there a way to test IDI without submitting a loan to IDI?
15. How should servicers determine if a loan is Alt-A?

IDI Errors
1. What happens if a servicer submits an .xls file instead of a .csv file? How long does it take to get the error
message when the wrong file format is sent?
2. If a 300-series error is received and the loan is scored through IDI, do servicers need to fix the error? Will it
affect the outcome?
3. What do servicers do if an error is received? Should they fix the error and resubmit?
4. How can servicers determine the cause of an error reported in an output file and how servicers resolve it?

General Policy
1. If a loan is found to be in imminent default, how does that help the borrower?
2. Are servicers required to use IDI for every loan?
3. Does the IDI indicator replace the Imminent Default Screen set forth in Announcement 09-05R?
4. How does IDI affect the incentives for servicers? For example, if a borrower is 40 days past due, would we
receive $1,000.00 or $1,500.00?
5. Does IDI treat loans in a Fannie Mae Mortgage-Backed Security (MBS) differently?
6. Can servicers still send solicitation letters to borrowers that are 31-60 days delinquent?
7. If a servicer receives a score of “2,” or “not in danger of imminent default” from IDI, is the borrower ineligible
for HAMP?
8. Who examines the IDI result? Does a Fannie Mae representative or the servicer review the results?

Top 10 Q&A

Q1. What is the effective date for servicers to implement IDI?


Fannie Mae and Freddie Mac servicers must have implemented IDI by March 1, 2010, unless
previously instructed to implement by June 1, 2010.

Q2. Where is the File Transfer Portal (FTP) located?


The FTP is accessed through HSSN (part of the Asset Management Network) on eFannieMae.com at
the following path:
 Home
 Technology Applications
 Servicing & Investor Reporting
 Asset Management Network – click “Launch” hyperlink and enter user ID and password to
log onto Asset Management Network

© 2010 Fannie Mae. Trademarks of Fannie Mae. Imminent Default Indicator is a trademark of Freddie Mac. 10/10
Q3. What values can servicers enter in the Monthly Debt Payment-to-Income Ratio field, #31?
Values should be entered into the system as a decimal, not as a percentage. For example,
enter 25.7% as .257, not as 25.7. The tool takes values >0 and <=4.0.

Q4. What value should servicers put into the IDI field Monthly Debt Payment-to-Income Ratio field,
#31, if the only source of income is unemployment, or if the borrower has no income?
Unemployment income cannot be included in IDI. If the only income is unemployment income,
then the income would be "null" or "zero." Per Freddie Mac's Technical Specifications document
regarding Field #31 (Monthly Debt Payment-to-Income Ratio), if monthly income is "null" or
"zero" OR if total monthly debt obligations is "null" or "zero," then set the Monthly Debt
Payment-to-Income Ratio to "Null."

Q5. What should servicers do if they receive an error message? Do servicers need to fix the error
and resubmit?
If servicers receive an error in the 100 to 299 range they will need to fix the error and then
resubmit the file before the borrower can be scored by IDI. If servicers receive an error code
300 or greater, they do not need to resubmit the file to get a score, but missing or invalid data
could affect the final results.

Q6. How should servicers determine the cause for an error and how to resolve the error?
Please review the Freddie Mac Technical Specifications document and the IDI job aid (located
on eFannieMae.com) to determine the cause of the error and how to resolve errors.

Q7. If a servicer receives a score of “2,” or “Not in danger of imminent default” from IDI, is the loan
not considered in imminent default?
The servicer may further evaluate a borrower for HAMP if a borrower has less than $25,000.00
in cash reserves and can document one of the following acceptable hardships:
 Death of the primary borrower or co-borrower
 Long-term or permanent disability or illness of the borrower, co-borrower, or IRS-defined
dependent family member
 Legally documented divorce or separation of the borrowers or co-borrower

Q8. What denial reason should servicers use for borrowers whose mortgage loan is not
characterized as “at risk of imminent default” due to receiving a score of “2” from IDI where the
borrower does not meet one of the acceptable hardship situations identified in Announcement
SVC-2010-02?
We do not have, nor offer to the servicer, a denial letter for HAMP. Announcement 09-36 offers
sample model clauses to be used in servicer denial letters only. The model clauses in
Attachment 1 provide sample language that may be used to communicate the status of a
borrower’s request for a Home Affordable Modification. Use of the model clauses is optional;
however, they illustrate a level of specificity that is deemed to be in compliance with
requirements of the program.

© 2010 Fannie Mae. Trademarks of Fannie Mae. Imminent Default Indicator is a trademark of Freddie Mac. 10/10
Q9. How should servicers verify assets? Should servicers accept the bank/investment account
statements that borrowers provide?
Servicers must review all required documentation submitted by the borrower and compare
information contained in that documentation to the information in the tax returns or tax transcript
to identify inconsistencies. Assets should be verified as usual per guidelines outlined in
Announcement 09-05R. A credit report should also be reviewed.

Q10. Where is the IDI job aid located on eFannieMae.com?


The IDI job aid can be found on eFannieMae.com at the following path:
 Single-Family
 Technology Applications
 Servicing & Investor Reporting
 Asset Management Network – click “Details” hyperlink
 Using the HSSN File Transfer Portal, Imminent Default Indicator
Direct link: www.efanniemae.com/lc/technology/amn/pdf/hssnftpidijobaid.pdf

FAQs by Category

Effective Date

Q1. What is the effective date for servicers to implement IDI?


Fannie Mae and Freddie Mac servicers must have implemented IDI by March 1, 2010, unless
previously instructed to implement by June 1, 2010.

Eligibility

Q1. What are cash reserves?


As outlined in Announcement 09-05R, cash reserves are liquid assets the borrower has
available for withdrawal from any financial institution or brokerage firm, including checking and
savings accounts, certificates of deposit (even if held for an extended time), mutual funds,
money market funds, stocks or bonds.

Q2. Do cash reserves include 401K funds?


Cash reserves, for purposes of evaluating a borrower through IDI, are any non-retirement liquid
assets the borrower has available for withdrawal. If the assets are held in a qualified retirement
account, the assets must not be considered as cash reserves.

Q3. Is a variable annuity considered a liquid asset?


No. A variable annuity is not a liquid asset.

© 2010 Fannie Mae. Trademarks of Fannie Mae. Imminent Default Indicator is a trademark of Freddie Mac. 10/10
Q4. How are servicers to verify assets? May servicers accept whatever bank/investment account
statements the borrowers provide?
Servicers must review all required documentation provided by the borrower and compare
information contained in that documentation to the information in the tax returns or tax transcript
to identify inconsistencies. Assets should be verified as usual per the guidelines outlined in
Announcement 09-05R. A credit report should also be reviewed.

Q5. Are loans that are not past due (less than 30 days) to be submitted to IDI as well?
Yes, current loans and loans less than 60 days past due must be submitted to IDI.

Q6. If the IDI result is "1," should the servicer automatically proceed with the Home Affordable
Modification Program (HAMP)?
If IDI presents a score of “1,” “In danger of imminent default” and the borrower has less than
$25,000.00 in cash reserves, the servicer may then determine whether the loan meets all other
HAMP eligibility requirements.

Q7. If the borrower states they have an auto payment on the Request for Modification and Affidavit
(RMA), but the credit report or supplied documentation does not reflect an auto payment,
should the servicer use this payment as part of the debt payment-to-income ratio calculation?
Does the servicer need to obtain proof of this payment?
All financial information (debt, income, assets) must be verified with the use of IDI (per
Announcement SVC-2010-02). Accordingly, the servicer should request documentation to
support the auto payment or re-run the credit report.

Q8. Can servicers use the borrower financial information form for files that were received prior to
3/1/10, but have not yet been reviewed for eligibility? Or should they go back and request the
RMA?
Servicers can use the borrower financial information form that is substantially similar in content
to the RMA. Per Announcement SVC-2010-03, the RMA is not required to be used. When the
RMA is not used, servicers must obtain an executed Making Home Affordable Program
Hardship Affidavit.

Q9. If a case has been received by the servicer prior to March 1, 2010, but not evaluated for
eligibility, should the servicer follow the IDI guidelines (in Announcement SVC-2010-02) or the
imminent default screen set forth in Announcement 09-05R?
Use of IDI is based on when the file is evaluated (and not received). If a servicer receives a file
prior to their implementation of IDI, but it is not evaluated until after such implementation, the
servicer should follow the new guidelines per Announcement SVC-2010-02.

Q10. Are borrowers that are 60 days or more delinquent or have cash reserves equal to or greater
than $25,000.00 eligible for IDI?
The servicer would not use IDI in these situations. IDI is for borrowers less than 60 days
delinquent and who have less than $25,000.00 in cash reserves.

© 2010 Fannie Mae. Trademarks of Fannie Mae. Imminent Default Indicator is a trademark of Freddie Mac. 10/10
Q11. Is IDI for those borrowers whose cash reserves total $25,000.00 or more?
IDI is only for borrowers who have cash reserves of less than $25,000.00.

Income Documentation and Commencement of the Trial Period

Q1. If servicers do not have the borrower's current financial information, can they put a loan
through IDI?
No. The borrower’s current financial information is required to evaluate the loan for an IDI result.

Q2. Does IDI determine if the trial period length should be three months or four months?
No. The number of trial period payments is determined based on delinquency and not on the IDI
score. Loans that are current at the time the borrower successfully qualifies for HAMP are
submitted as a four-month trial period and loans that are delinquent (greater than 30 days) are
submitted as a three-month trial period. Example: A loan that is 31 to 59 days delinquent must
be submitted to IDI and even if it receives a score of “1,” or “in danger of imminent default,” the
loan should still be submitted as a three-month trial period as it is already delinquent.

Accessing IDI

Q1. Where is the IDI job aid located on eFannieMae.com?


The IDI job aid can be found on eFannieMae.com at the following path:
 Single-Family
 Technology Applications
 Servicing & Investor Reporting
 Asset Management Network – click “Details” hyperlink
 Using the HSSN File Transfer Portal, Imminent Default Indicator
Direct link: www.efanniemae.com/lc/technology/amn/pdf/hssnftpidijobaid.pdf

Q2. Where is the File Transfer Portal (FTP) located?


The FTP is accessed through HSSN (part of the Asset Management Network) on eFannieMae.com at
the following path:
 Home
 Technology Applications
 Servicing & Investor Reporting
 Asset Management Network – click “Launch” hyperlink and enter user ID and password to
log onto Asset Management Network

Q3. Has the servicer registration process been changed in any way for IDI? If someone is signing up
now for HomeSaver Solutions Network (HSSN) and IDI, is it one process?
All servicers that have access to Asset Management Network and HSSN prior to February 27, 2010,
will have access to the FTP. Any servicers that do not have access prior to that date will need to
register for access on www.efanniemae.com/sf/technology/accountmanage/sirreg.jsp.
The servicer must select HSSN and access to the FTP on the registration form.

© 2010 Fannie Mae. Trademarks of Fannie Mae. Imminent Default Indicator is a trademark of Freddie Mac. 10/10
Q4. Is there a way to regenerate the output file?
Log in to the FTP and go to “Completed Transactions.” Servicers can view their output files on
that screen.

Q5. Is there a historical table to view data that was already submitted?
The “Recently Submitted Transactions” screen in the FTP will show all submitted, processed
and completed transactions.

Q6. Is the history file listed by seller/servicer ID or branch ID?


The history file is listed by the full 9-digit seller/servicer ID.

Submitting to IDI

Q1. If a servicer enters an incorrect value or leaves an optional field blank, will it impact the IDI
result?
Yes. If servicers receive an error in the 100 to 299 range, they will need to fix the error and then
resubmit the file before the borrower can be scored by IDI. If servicers receive an error code
300 or greater, they do not need to resubmit the file to get a score, but missing or invalid data
could affect the final results.

Q2. Do the .csv file names require specific characters?


Yes. The .csv file names must be alpha-numeric and cannot contain special characters (e.g., =
* $ < ) (& _ etc.), spaces, or underscores.

Q3. Can servicers see the calculations behind the model?


No. The model is proprietary.

Q4. Can servicers use Fannie Mae's example spreadsheet template to upload data, or are servicers
required to create their own spreadsheet?
Servicers are not required to use Fannie Mae’s Data File Submission Template, found on
eFannieMae.com. This template is provided for those servicers who do not want to create their
own template.

Q5. Is there another way to submit a file to IDI outside the interface using FTP protocols?
No. All input files must be submitted via the FTP tool.

Q6. When must a servicer use IDI?


Loans must be submitted to IDI when a servicer is evaluating a borrower for imminent default
that is either current or in default but <60 days past due.

© 2010 Fannie Mae. Trademarks of Fannie Mae. Imminent Default Indicator is a trademark of Freddie Mac. 10/10
Q7. Can a loan be resubmitted multiple times?
Yes. A loan can be submitted to IDI multiple times.

Q8. Does IDI maintain a report of how often a file was submitted?
The “Recently Submitted Transactions” screen in the FTP will show all submitted, processed
and completed transactions.

Q9. How do servicers receive replies to a bulk file that was sent to IDI? Do servicers receive one e-
mail with multiple answers or multiple e-mails in response to a bulk file?
Servicers will receive one e-mail per file submitted informing them that the output file is ready for
review. They will log into the FTP tool to retrieve the output file. The output file will score each
loan that was submitted in the input file.

Q10. What values can servicers enter in the Monthly Debt Payment-to-Income Ratio field, #31?
Values should be entered into the system as a decimal, not as a percentage. For example,
enter 25.7% as .257, not as 25.7. The tool takes values >0 and <=4.0.

Q11. What value should be put into the monthly debt payment-to-income ratio field, if the only source
of income is unemployment?
Unemployment income cannot be included in IDI. If the only income is unemployment income,
then the income would be "null" or "zero." Per Freddie Mac's Technical Specifications document
regarding Field #31 (Monthly Debt Payment-to-Income Ratio), if monthly income is "null" or
"zero" OR if total monthly debt obligations is "null" or "zero" then set the Monthly Debt Payment-
to-Income Ratio to "Null."

Q12. What do servicers do if their seller/servicer ID is not in the drop-down box in IDI?
If a servicer’s seller/service ID is not listed in the drop-down box in IDI, they must confirm that
they are registered for HSSN, AMN, and IDI. If they are registered, they should send an e-mail
to Fannie Mae’s Servicer Support Center at: servicing_solutions@fanniemae.com.

Q13. Is an AVM necessary to complete field “AK,” estimated property value?


The property value used should be a property valuation that meets the criteria per
Announcement SVC-2010-03 which, in part states, “Servicers must obtain a property valuation
input for the NPV model using an automated valuation model (AVM), provided that the AVM
renders a reliable confidence score, a broker’s price opinion (BPO), or an appraisal. In all cases,
the property valuation used cannot be more than 90 days old as of the date the servicer first
evaluates the borrower for a HAMP trial period plan using the NPV model.

Q14. Is there a test environment for IDI? Is there a way to test IDI without submitting a loan to IDI?
There is not a test environment for IDI. Any loan that is submitted through IDI will be captured
as a valid loan submission.

© 2010 Fannie Mae. Trademarks of Fannie Mae. Imminent Default Indicator is a trademark of Freddie Mac. 10/10
Q15. How should servicers determine if a loan is an Alt-A loan?
Servicers should obtain this information by downloading and viewing an “Enhanced” report in
Servicer's Reconciliation Facility (SURF™).

IDI Errors

Q1. What happens if a servicer submits an .xls file instead of a .csv file? How long does it take to
get the error message when the wrong file format is sent?
When attempting to submit a file other than .a .csv file, the FTP tool will immediately recognize
the wrong file format and return an error message.

Q2. If a 300-series error is received and the loan is scored through IDI, do servicers need to fix the
error? Will it affect the outcome?
If servicers receive an error in the 100 to 299 range, they will need to fix the error and then
resubmit the file before the borrower can be scored by IDI. If servicers receive an error code
300 or greater, they do not need to resubmit the file to get a score, but missing or invalid data
could affect the final results.

Q3. What do servicers do if an error is received? Should they fix the error and resubmit?
If servicers receive an error in the 100 to 299 range, they will need to fix the error and then
resubmit the file before the borrower can be scored by IDI. If servicers receive an error code
300 or greater, they do not need to resubmit the file to get a score, but missing or invalid data
could affect the final results.

Q4. How can servicers determine the cause of an error reported in an output file and how servicers
resolve it?
Servicers may review Freddie Mac’s Technical Specifications document and the IDI job aid to
determine the cause of the error and how to resolve it. If servicers are unable to resolve an
error, they may contact Fannie Mae’s Servicing Solutions Support Team at
servicing_solutions@fanniemae.com.

General Policy

Q1. If a loan is found to be in imminent default, how does that help the borrower?
A borrower that qualifies as having an imminent default is able to be evaluated for a HAMP
modification. Borrowers not in imminent default will not have the opportunity to be evaluated for
a HAMP modification.

Q2. Are servicers required to use IDI for every loan?


Fannie Mae and Freddie Mac servicers must have implemented IDI by March 1, 2010, unless
previously instructed to implement by June 1, 2010. Loans must be submitted to IDI when a
servicer is evaluating a borrower for imminent default that is either current or in default but <60
days past due.

© 2010 Fannie Mae. Trademarks of Fannie Mae. Imminent Default Indicator is a trademark of Freddie Mac. 10/10
Q3. Does the IDI indicator replace the Imminent Default Screen set forth in Announcement 09-05R?
The IDI indicator tool will provide the imminent default evaluation on all loans evaluated on and
after March 1, 2010.
Announcement SVC-2010-02 stated the following: “For example, if a borrower facing imminent
default was evaluated prior to March 1, 2010 and was determined to be eligible based on the
imminent default screen outlined in Announcement 09-05R (i.e., cash reserves of less than
three times the monthly mortgage payment including taxes and insurance and a debt coverage
ratio of less than 1.20), the servicer must evaluate the borrower for eligibility using verified
income based on the same imminent default evaluation criteria.”

Q4. How does IDI affect the incentives for servicers? For example, if a borrower is 40 days past due,
would servicers receive $1,000.00 or $1,500.00?
The IDI result has no impact on incentives, regardless of delinquency status.

Q5. Does IDI treat loans in a Fannie Mae Mortgage-Backed Security (MBS) differently?
No. The IDI evaluation is not impacted. As a reminder, an MBS loan must be re-classed prior to
being modified.

Q6. Can servicers still send solicitation letters to borrowers that are 31-60 days delinquent?
Yes.

Q7. If a servicer receives a score of “2,” or “Not in danger of imminent default” from IDI, is the
borrower ineligible for HAMP?
The servicer may further evaluate a borrower for HAMP if a borrower has less than $25,000.00
in cash reserves and can document one of the following acceptable hardships:
 Death of the primary borrower or co-borrower
 Long-term or permanent disability or illness of the borrower, co-borrower or IRS-defined
dependent family member
 Legally documented divorce or separation of the borrowers or co-borrower

Q8. Who examines the IDI result? Does a Fannie Mae representative or the servicer review the
results?
The results are automatically transmitted to the servicer. There is no human intervention to
obtain IDI results between the time the file is submitted through the FTP and the results are sent
back to the servicer; therefore, a Fannie Mae representative does not review the IDI results.
Fannie Mae will, however, be conducting analysis and monitoring results generated by IDI
periodically, as it is part of its portfolio management.

© 2010 Fannie Mae. Trademarks of Fannie Mae. Imminent Default Indicator is a trademark of Freddie Mac. 10/10