All agencies such as Fannie Mae, Freddie Mac and Ginnie Mae just released major changes to what it will require lenders to have in total net worth to be considered “acceptable.” This is sure to knock many lenders out of the home mortgage market. The new standards will go into effect on December 31, 2008.
· Minimum Lender Adjusted Net Worth to be maintained by a lender is $1.65 million for already approved seller/servicers
· Minimum Lender Adjusted Net Worth to be maintained by a lender is $2.5 million for new lenders seeking Fannie Mae approval PLUS a dollar amount equal to one quarter of one percent of the outstanding balance of its total mortgage portfolio of loans served for Fannie Mae
Additionally, in light of recent major losses by many financial entities, Fannie Mae will impose the following rules in order to further protect itself.
· Fannie Mae will terminate a lender’s rights if it sees a decline in Lender Adjusted Net Worth of more than 25% over a quarterly reporting period, or more than 40% over a two-consecutive-quarter reporting period
· This new condition will actually look back over the past six month at the end of this year (June 30-December 31, 2008) to determine if a lender is in violation of this new standard
Because we are already one of 11seller/servicers with Fannie Mae because of our relationship with Network Funding, United Lending LLC and I want to assure our clients and referral partners that we are proud to be in compliance with the increased requirements and look forward to a continued business relationship. Trust that our company will continue to be your rock in the business.
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