OnLoan.com has become the second Internet-only originator authorized to sell loans to both Fannie Mae and Freddie Mac.
The Fort Lauderdale, Fla., online mortgage originator said it got Fannie's approval this month and Freddie's in March.
E-Loan.com has had both approvals for over a year. Mortgage.com says it has had them for years, but it also has branches.
Adrienne Brodie, OnLoan's director of secondary marketing, said the approvals will bring it better price execution in mortgage-backed securities and let it produce more of them.
Access to Fannie's and Freddie's delivery systems will help OnLoan communicate directly with the two government-sponsored enterprises, do cash executions, and get involved in new products, such as credit enhancements, Ms. Brodie said.
With no need for a middleman, OnLoan will be able to negotiate credit enhancements, guarantee fees, cash window prices, and mortgage-backed securities prices with Freddie and Fannie when selling them loans. It will not have to depend "on other investors to pass those enhancements on to us," she said.
The approvals will also let OnLoan hold on to the servicing of the loans it sells, Ms. Brodie said. "If we decide to retain our servicing, it will enhance our asset position," she said.
Furthermore, permission to deal directly with Fannie and Freddie amounts to a seal of approval for OnLoan, Ms. Brodie said. "Just the fact we've been recognized by both gives us a lot of validity in the marketplace, because they are pretty stringent in their approval requirements," she said.
Barney Danzansky, OnLoan's president and chief executive officer, said that having a trustworthy image will help its technology business too. OnLoan wants to sell to retail customers, mortgage banks, and brokers, on a private-label basis, the mortgage information that it uses on its own site. It also wants to sell them the real-time automated mortgage decision programs it uses.