Ally Financial on Friday told its mortgage banking clients that it will "significantly" curtail government lending tied to some government agencies, according to a memo provided to National Mortgage News.
The affected agencies are the Federal Housing Administration, the Department of Veterans Affairs, and the Department of Agriculture.
Few details were available, and a company spokeswoman could not be reached for comment.
Among all lenders Residential Capital Corp./Ally ranks sixth nationwide in FHA lending, according to figures compiled by NMN. It is unclear how much of the firm's production is tied to the correspondent channel. (Last week the company closed its MBS trading desk.)
A few months back ResCap/Ally slashed its presence in correspondent lending, but promised to maintain relations with certain high volume mortgage banking customers.
The new memo notes that, "As a result, all loans including AOT [assignment of trade], Direct and Forward Trades must be locked/assigned on or before 5:00 PM EST, April 16, 2012. GMACB will honor existing pipeline. No relocks will be accepted and a maximum of 30 days of extensions will be allowed. All other lock policies will apply."
Among all lenders ResCap/Ally ranks sixth nationwide. In the correspondent channel it ranked third in 4Q but that was before the announced cutbacks.
