Business News

One-Stop Shopping for Servicing Released Sales

By Kathleen Belleville | December 8, 2015

A Closer Look at Qualified MortgagesLenders selling mortgages in the secondary market face a variety of decision points as they work to maximize profits while mitigating risks. Added to their decisions involving execution and pricing is the choice they have to retain or release the servicing rights on the loans they sell.

That choice is now a lot easier for whole loans sold to Fannie Mae. Lenders looking to take advantage of a concurrent servicing sale option have a convenient and efficient solution—Fannie Mae’s Servicing Execution Tool (SET) is now available directly from the whole loan committing application, Pricing & Execution – Whole Loan™.

Sell the Loan Asset and the Servicing, Concurrently

Concurrent servicing sales, also known as co-issue sales, allow lenders to transfer servicing rights on a loan at the same time the loan is sold in the secondary market. Using the Servicing Execution Tool, lenders selling loans to Fannie Mae can access upfront pricing and all-in funding for the sale of the loan, and the servicing asset, at the same time.

And SET allows lenders to easily and efficiently execute co-issue sales on a loan-by-loan basis, through either a best efforts or a mandatory execution.

”We continue to focus on making it easier for sellers to transact business with us and integrating SET within Pricing & Execution — Whole Loan facilitates the transfer of servicing rights and timely funding all in a single transaction” explains Ed Hohmann, Vice President for Capital Markets at Fannie Mae.

Pricing & Execution — Whole Loan Integration

Fannie Mae recently completed the transition of all lenders to the new Pricing — Execution – Whole Loan application, offering benefits that include increased committing flexibility and an easier commitment process.

The integration of the SET solution with Pricing & Execution – Whole Loan offers another example of how Fannie Mae is listening to customer feedback and delivering improved convenience and increased options for selling loans directly to Fannie Mae.

Lenders that currently sell loans on a servicing retained basis now have a seamless option for servicing released sales if and when they choose that execution option.

”With SET available in Pricing & Execution – Whole Loan, we’re facilitating everything. Lenders have access to best execution on the servicing released premium from participating servicers along with the Fannie Mae loan pricing—all in a single funding transaction,” according to Sherry Walton, Director of Product Development and Management at Fannie Mae.

With the SET/Pricing & Execution – Whole Loan integration, sellers can view their single loan price from Fannie Mae and the Net Funding SRP from the winning servicer bid in their commitment details. And, they receive funding in a single transaction.

Easy Access to SET

All Fannie Mae-approved sellers are eligible to participate in SET and no additional permissions are required. However, lenders must be registered for SET in order to complete a servicing-released commitment via Pricing & Execution – Whole Loan. Registration materials and information are available on the Servicing Execution Tool page of the Fannie Mae website.

Once registered for the SET option in Pricing & Execution – Whole Loan, a lender can easily view and access their SET-specific commitments just as they would their mandatory or best efforts retained-servicing pipelines.

Fannie Mae is continually looking for ways to help lenders have more certainty when delivering loans. The Servicing Execution Tool available in Pricing & Execution – Whole Loan offers a simplified process for conducting concurrent sales and offers lenders one more option for efficient pipeline management.

Kathleen Belleville is a communications manager at Fannie Mae.