Washington Mutual said Thursday that it will sell most of its fixed-rate conforming mortgage loans to Fannie Mae.
The thrift company is the latest major lender to ink such a pact with either Fannie Mae or Freddie Mac. Norwest Mortgage earlier this year agreed to sell most of its loans to Freddie Mac, triggering a series of deals that are changing the way secondary market share is divided. Previously, lenders decided between Fannie and Freddie as loans were made.
Wamu said the agreement lets it use its own automated underwriting system to originate and sell loans to Fannie. Fannie and Wamu also plan to share credit risk management techniques, the thrift company said. It also plans to expand its product offerings to incorporate Fannie's mortgage products.
Wamu said Fannie is also considering buying its fixed-rate mortgages that allow consumers to eliminate private mortgage insurance payments and lower the interest rate on a loan if certain conditions are met. -- Joshua Brockman