Selling Guide

Published October 2, 2018

C2-1.2-02: Best Efforts Commitment Pricing, Periods, and Fees (05/26/2015)

This topic provides information on best efforts commitments, including:

Best Efforts Commitment Pricing

As is the case with mandatory whole loan commitments, Fannie Mae offers lenders a “live” price in Fannie Mae’s whole loan committing application as its purchase price for loans delivered via best efforts commitments. Live prices move throughout the day, generally in tandem with the MBS market. Fannie Mae may charge fees or make pricing adjustments in conjunction with a best efforts commitment. See also C1-1-01, Execution Options. Where a concurrent sale of servicing has been arranged via the Servicing Execution Tool (SET) in the whole loan committing application, Fannie Mae will pay the acquisition price (subject to adjustments) plus or minus certain amounts related to the sale of servicing. See C2-1.3, Servicing Execution Tool to Sell Whole Loans, for more information.

Best Efforts Pair-off Fees and Duplicate Commitment Price Adjustments

Under the best efforts commitment option, generally a pair-off fee will not be assessed for commitments that fallout due to:

  • cancellation of an applicant's rate lock, as long as the cancellation results from an applicant withdrawal or lender declination; or

  • a change to the product type or key data which results in a change of the committed loan from a loan eligible for a best efforts commitment to a loan ineligible for a best efforts commitment.

A pair-off fee will be assessed for commitments where the fallout event is due to a failure, for any reason, to deliver the closed and committed loan to Fannie Mae, including when a lender (or a third-party originator who originates in the lender's name) has solicited new pricing and committed or sold the loan to Fannie Mae or another investor.

Fannie Mae may cancel a commitment and charge a pair-off fee in the event the property address is missing or fictitious or in the event the identical property address is used to enter into multiple commitments.

A duplicate commitment price adjustment will be assessed in the event a lender delivers a loan to Fannie Mae against any other (duplicate) commitment(s) for the same borrower and property address committed prior to or within 30 days of the original commitment's fallout or expiration date (the earlier of the two).

Best Efforts Commitment Periods and Extension Fees

As is the case with mandatory commitments, best efforts commitment periods may be as short as one day and as long as 90 days. Lenders may extend commitments on or before the original commitment expiration date for up to a maximum of 30 days for a fee. Lenders may request multiple extensions as long as the total extension period is not longer than 30 days. A best efforts commitment with a “Closed” loan status will automatically extend for five calendar days until the loan is purchased or the commitment has been extended for a maximum of 60 calendar days from the original expiration date. After a commitment has reached its maximum allowed auto-extension period, the whole loan committing application will automatically pair off the “Closed” status commitment.

Fannie Mae will notify lenders via the whole loan committing application of fees associated with extending the commitment period. Once notice is given, payment of the fee becomes an absolute obligation.

Note: All committing fees and post purchase price adjustments will be drafted from the lender’s draft account with Fannie Mae. All draft fees can be viewed on Fannie Mae’s website.

Related Announcements

The table below provides references to the Announcements that have been issued that are related to this topic.

Announcements Issue Date
Announcement SEL-2015–06 May 26, 2015
Announcement SEL-2011–11 October 25, 2011