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The Secondary Marketing Report


The Secondary Marketing ReportRecent secondary activity

October 29, 2008


Fannie Mae has launched a new program for purchasing residential loans and also indicated its interest in acquiring multifamily loans, while Ginnie Mae has issued parameters for purchasing HOPE for Homeowners loans. Meanwhile, a new consulting firm, new software and new alliance have launched to help loan buyers make better decisions.

Fannie has partnered with fellow government sponsored enterprise the Federal Home Loan Bank of Chicago to offer MPF Xtra, the Federal Housing Finance Agency reported earlier this month. The new program will enable FHLBank of Chicago members to sell fixed-rate mortgages without dealing directly with Fannie. The acquisitions are not reflected of FHLBank of Chicago’s balance sheet.

“Fannie Mae may find it more efficient to manage one relationship — with the FHLBank of Chicago — than to work with a number of smaller, individual institutions,” FHFA’s announcement said.

Fannie issued a statement indicating the MPF Xtra program will help both firms meet national calls to expand their service to the market and provide more secondary market liquidity. Fannie hopes to offer the program through other FHLBs.

Multifamily loans are also being targeted by Fannie, a bulletin last month said. The Washington, D.C.-based firm said it is looking for $100 million pools of closed loans on properties of at least five units. Loans can be purchased on a whole-loan basis, exchanged with other loans in mortgage-backed securities or through a REMIC.

“Whether you’re looking to reduce risk, secure liquidity, or relieve regulatory pressure — our team can help,” Fannie stated. “Manage and mitigate your concentration risks, be they credit, geographic, or borrower, by selling or securitizing your loans.”

Ginnie Mae issued a bulletin indicating that all loans under the H4H program must be pooled only under the Ginnie Mae II program’s multiple issuer pool type, “MFS.” Packages of H4H loans — which are effective from Oct. 1, 2008, to Sept. 30, 2011 — can be pooled in MFS securities with issue dates on or after Nov. 1, 2008.

Loans where the borrower fails to make the first payment within 120 of the due date will be considered defective. Ginnie is requiring that defective loans be pulled from the pool by substitution or repurchase.

The new 5.8 version of PowerSeller Secondary Marketing and Risk Management System helps manage secondary market activities, streamlines marketing and operations and facilitates better communication, Associated Software Consultants Inc. said last week. New pricing models have been integrated into the mark-to-market and best-execution analyses, while the latest version — available on a subscription and non-subscription basis — has been enhanced with streamlined best-efforts-commitments handling and improved reporting.

“The key to better execution is accurate, timely data analysis,” Associated Director of Secondary Marketing Greg Crosby said in the statement. “This technology tool multiplies lenders’ analysis, reporting and communications capabilities. It provides the guidance needed to raise execution levels.”

Tradeweb and the Mortgage Industry Advisory Corp. have entered a strategic agreement enabling Tradeweb trades to automatically be uploaded to MIAC Analytics, reducing error risk and improving performance, an announcement last week said. Through the alliance, MIAC clients can automate the trade input and confirmation process while maintaining transparency and control.

Allon Financial has launched to offer analytical, advisory and consulting services for whole-loan trades and bond purchases. Prospective customers of the new due diligence provider include hedge funds, mutual funds, private investors, government agencies, ratings agencies and mortgage originators.

Allon, which specializes in seasoned performing and non-performing loan reviews and quality control for agency delivery, said it acquired Edison Mortgage Decisioning Solutions. It utilizes a Web-based system to automate data downloads, filter risk and minimize data duplication and error. The system also provides loan buyers with real-time access to view the data throughout the transaction.

Volume in the secondary market for defaulted mortgages is expected to accelerate, according to — which markets training courses on note trading. The Treasury plan to purchased mortgage-related securities will drive the increased activity.


Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of


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