After closing payment information

When your loan transfers to our servicing center, it may take a few weeks for all documents and information to be updated. Please reach out to us if you receive a notice that your insurance lapsed and your loan is escrowed. Our email address is servicing@fairwaymc.com. We are more than happy to help you!

To verify if the funds need to be placed back into your escrow or are yours to keep, please email servicing@fairwaymc.com

Some city and county tax agencies send copies of bills to the property owner, even if taxes are included in your escrow account. If you have questions or would like to forward the bill to Fairway to ensure it is paid; please email us at servicing@fairwaymc.com or call 1-800-201-7544.

In some instances, escrow accounts may be removed from the mortgage loan. These have to be reviewed on a case-by-case basis, and a written request signed by every customer on the loan is required. For more information, please email us at servicing@fairwaymc.com or call 1-800-201-7544.

Escrow accounts are required the life of the loan for FHA and VA loans. Conventional loan types may qualify for escrow deletion if specific investor requirements are met.

An escrow account is an account that receives a portion of your monthly mortgage payment that covers the yearly cost of:

• Taxes
• Homeowners Insurance
• Mortgage Insurance
• And other escrowed items, as applicable

The monthly escrow payment amount equals 1/12 of the total of your taxes, homeowners insurance, and mortgage insurance, if applicable. Depending on the location and state of your mortgage property, there are additional factors in the calculation of your escrow payment.

The monthly escrow amount is added to the principal and interest portion of your payment to make up your total monthly mortgage amount. Escrow amounts may change from year to year based on your tax and insurance amounts.

Some states allow mortgage servicers to maintain a cushion -- or an additional amount of funds -- to help offset a large shortage on the escrow balance should tax amounts and/or insurance premiums increase significantly. Cushion amounts may be no more than 1/6 of the total escrow charges for the year, which means no more than two months’ worth of monthly escrow collection may be maintained in the escrow account above and beyond amounts required to pay the bills for escrowed items when they come due.

The process of removing PMI once a recast is complete does not occur automatically. This is a separate request and process that is handled by your new servicer.

Depending on the loan type, the amount paid toward the unpaid principal balance, and the original appraisal amount, loans may qualify to have PMI removed after a recast is complete.

Loans must meet investor guidelines for PMI deletion, including loan-to-value ratios and payment history requirements. The appraised value from the appraisal used at the origination of the loan is good for 180 days from the appraisal completion date for purposes of removing PMI after a recast. After this timeframe, investor guidelines may require a new appraisal or valuation to ensure property value has not declined since the beginning of the loan.

Decisions and requirements may vary from servicer to servicer based on processes and interpretations. Your current servicer performs this evaluation and the processing of the request.

A recast is the process of paying a large principal payment on your loan and re-amortizing the payments over the remaining term of the mortgage. This does not shorten the term or change the interest rate like a refinance, but it reduces the amount of the principal and interest portion of the monthly payment over the remaining life of your loan. This process is most commonly associated with the sale of an original home, investment home or second home.

Example – When buying and financing a new home, the new mortgage may originate before the sale of the previously owned property occurs. When the previously owned property sells, some customers wish to pay those sale proceeds toward the unpaid principal balance of their new mortgage loan.

Conventional Fannie Mae and Freddie Mac loan types are eligible to be recast.

FHA, USDA and VA loan types are not eligible to be recast.

• Written request for a recast is required.
• A minimum amount of $10,000.00 is required to be paid toward the outstanding principal balance.
• A recast fee will be assessed, and this varies by servicer.
• Loans cannot have had any prior modifications.
• Loans cannot be delinquent on monthly payments.
• Loans cannot be in an active bankruptcy status.
• Interest-only loan types are not eligible.
• Adjustable-rate mortgage (ARM) loans must be reviewed for a recast no later than six-months before the first scheduled interest rate change.
   

Please view this helpful video below for more information about a recast.

VIDEO: What is a Recast

Note: Some investor and loan guidelines may require up to the first three monthly payments to be made before becoming eligible for the recast process. Listed above are general guidelines. Specific requirements may vary depending upon the servicer and/or investor of your mortgage loan. For more information, feel free to contact us at servicing@fairwaymc.com.

Decisions and requirements may vary from servicer to servicer based on processes and interpretations. Your current servicer performs this evaluation and the processing of the request.

Private mortgage insurance (PMI) is required on Conventional mortgage loans that originate with a loan-to-value (LTV) ratio of 80% or more. If the down payment at the time of the origination is less than 20% of the original mortgage loan amount, PMI must be included in the escrow portion of the monthly payment.

Based on your loan type and other investor requirements, you may be eligible to request PMI be removed prior to its automatic termination date.

• You can request private mortgage insurance (PMI) be removed when your loan-to-value ratio (LTV) reaches 80%. A written request must be submitted to your current servicer for the loan to be reviewed and the conditions must meet all applicable requirements for approval.
• Private mortgage insurance (PMI) will automatically be dropped when the LTV reaches 78% based on the original term and amortization of the mortgage loan.
   

For more information please contact our servicing department at servicing@fairwaymc.com

VIDEO: How to Remove Private Mortgage Insurance (PMI)

The ability to remove PMI is governed by federal law and investor requirements. An investor is the party who owns your mortgage loan. Examples of the top investors for Conventional loans are Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation). Decisions and requirements may vary from servicer to servicer based on processes and interpretations. Your current servicer performs this evaluation and the processing of the request.

• Fannie Mae - View Guidelines

• Freddie Mac - View Guidelines
       

Upon the sale and servicing transfer of your mortgage loan, Fairway is unable to subsequently change your new servicer. Your new servicer controls the activities and decisions supporting your mortgage loan. With written authorization (as per your new servicer’s requirements), Fairway may be an advocate for you if requested. Even if your servicing transfers, your relationship is important to each of us at Fairway.