Fannie Mae is telling new seller/servicers — including community banks and non-depositories alike — that it will cap how much product they can sell to the GSE based on their net worth and other factors, ASR sister publication National Mortgage News has learned.
One advisor who works with seller/servicers told National Mortgage News: “I can’t believe it. One of our clients called to say that their Fannie rep said they were going to cap per-year volume because of their net worth.”
A GSE spokesman confirmed the policy, saying that many new approved seller/servicers “are unfamiliar to us and do not have a track record with Fannie Mae by which to gauge what the profile and performance of their future deliveries will be.”
He added, "In all cases where a delivery cap may be put in place, we engage the lender in a discussion about their business needs and work to establish appropriate delivery levels. Net worth is a significant consideration but so is expected delivery profile, actual performance and financial strength.”
Fannie and Freddie together control 70% of the residential production market. Firms that do not have seller/servicer approvals are forced to sell conventional production to large correspondent buyers such as Wells Fargo. But as the spokesman noted, "There has been significant contraction among the correspondent buyers in the secondary market, leading to growth in the number of lenders seeking to do business directly with Fannie Mae.” (For a more complete analysis of the issue see the Monday paper edition of NMN.)