Lenders participating in Fannie Maes As Soon As Pooled program will be able to cut their funding time for mortgage-backed security trades to just one day, Fannie said as it unveiled a program improvement that will allow it to provide overnight funding.
The new enhancement to the ASAP and ASAP Sale products will allow lenders who submit MBS trades via Mornetone of Fannies communication networksby noon EST to receive funding by the afternoon of the following day, said Donna Callejon, Fannie Maes senior vice president of marketing.
Those lenders can then use those funds to get more loans into their pipelines.
Callejon, who made Fannies announcement during the California League of Savings Institutions Western Secondary Mortgage Market Conference in San Francisco July 13, added that in order to receive next- day funding, the lenders custodian must electronically certify the submitted pools.
Through the ASAP program, Fannie is able to offer lenders low rates using either Libor or federal fund indices. Fannie expanded its MBS funding capabilities in 1993 by introducing ASAP Sale, which added an accounting benefit of treating an MBS trade as a sale before the security is issued.
The ASAP product also allows MBS trades to be funded up to 45 days in advance of the PSA settlement date.