Fannie Mae is telling small lenders and servicers that it will cap the volume of loans they can sell to the government-sponsored enterprise based on their net worth and other factors, National Mortgage News has learned.
A GSE spokesman confirmed the policy, saying that many small lenders and servicers recently approved to sell loans to Fannie "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 that "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."
One advisor who works with seller/servicers told NMN: "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."
Fannie and Freddie Mac 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 (WF). But as the Fannie 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."