For years it has been considered one of the industry's "bargains" — establishing a net worth of just $250,000 can let a mortgage bank become a Freddie Mac seller/servicer. But this is about to change.
Late last week a spokesman for Freddie confirmed that the McLean, Va., government-sponsored enterprise is on the verge of increasing its net-worth requirement, though he would not say by how much.
Industry sources said that Freddie's new requirement would probably be in the range of the Fannie Mae minimum, which is currently $1.65 million and is scheduled to rise to $2.5 million at yearend. (A year ago Fannie had the same minimum as Freddie.)
For seller/servicers the increase is just the latest rise in the cost of doing business — but not entirely unexpected.
Now, more than ever, Fannie and Freddie are forcing seller/servicers not only to buy back delinquent loans but also, in some cases, to transfer the servicing on delinquent loans to third-party specialty servicing companies — even if the current servicer is still in business.
"There's a major change coming in 'high-touch' servicing," said one investment banker, who requested that he not be named.
"The GSEs aren't going to wait around while these loans go 60-plus days late," he said. "Increasingly, you will see them move that servicing to another shop."