Hungry mortgage bankers got a boost today by Freddie Mac, which announced a move to support warehouse lending. The government-run company is standing behind purchases if the seller fails.
The McLean, Va.-based company launched a pilot program designed to help its approved seller-servicers obtain warehouse lines-of-credit through participating warehouse lenders.
Freddie said it will provide standby commitments to participating warehouse lenders on qualifying loans if the seller-servicer is unable to meet its contractual obligations or fails.
Pre-funding reviews will be required.
“Freddie Mac seller-servicers interested and who qualify for this program will need to enter into a separate agreement directly with the participating warehouse lender,” the news release explained. “The credit line from the warehouse lender that is supported by the standby commitment will fund only the loans the participating seller-servicer intends to sell to Freddie.”
The move — reportedly blessed by Freddie’s regulator, the Federal Housing Finance Agency — was made to support both single-family and multifamily lending.
Natty Mac, owned by Guggenheim Partners, is already working with Freddie as a warehouse lender in the pilot program.
“The warehouse lending industry has nearly exited the market, making it increasingly difficult for lenders to fund loans,” Freddie Chief Executive Officer Charles E. Haldeman Jr. said in the statement.
