Fannie Mae negotiates the terms of a Master Agreement specifically with each lender. The Master Agreement defines any specific terms and conditions that mortgage loans delivered to fulfill a Master Agreement must meet, such as special eligibility criteria, underwriting requirements, or required credit enhancements.
The terms of a lender’s specific Master Agreement may not necessarily apply to any other transaction between the lender and Fannie Mae.
The Master Agreement specifies the aggregate outstanding principal amount that Fannie Mae expects the lender to deliver. If a lender fails to deliver the specified amount by the expiration date of a specific contract, Fannie Mae may require the lender to pay Fannie Mae a back-end buyout fee. The method for determining the fee is specified in the Master Agreement. Fannie Mae will draft the applicable fee from the lender’s designated custodial account.
General terms and conditions that apply to all Master Agreements are set out in E-2-03, Master Agreement Terms and Conditions.