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Secondary Marketing WireRecent secondary activity

December 11, 2007

By SAM GARCIA

Recent secondary marketing activity included an increase in fees for agency loans and the launch of due diligence services for reverse mortgage portfolios.

Citing “continued deterioration in the mortgage market,” Freddie Mac issued a bulletin indicating it will begin charging a 25 basis point post-settlement delivery fee. The new fee applies to loans sold under flow purchase contracts with settlement dates on or after March 9, 2008.

The fee will apply to mortgages sold with recourse and indemnification but not to loans acquired on a bulk sale basis, the McLean, Va.-based secondary lender said.

The charge is in addition to other delivery fees, including the new indicator score/loan-to-value delivery fee, according to the bulletin.

Freddie’s new fee follows Fannie Mae’s move last week to impose an adverse market delivery charge of 25 BPS on all whole loan mortgages purchased on or after March 1, 2008, or loans delivered into mortgage-backed securities with issue dates on or after March 1, 2008.

The move by Fannie prompted criticism by the National Association of Home Builders, whose chief executive officer Jerry Howard said, “This is the exact opposite of what needs to be done and underscores the importance of Congress quickly enacting legislation that would strengthen regulatory oversight of government-sponsored enterprises,” according to an announcement Friday.

Freddie explained in its bulletin that its “new Market Condition Delivery Fee will enable Freddie Mac to continue fulfilling our important housing mission in the current market environment.”

In addition to fee increases, Freddie — which reported a $2.0 billion third quarter loss — recently said it would offer $6 billion of only non-convertible non-cumulative perpetual preferred stock, cut its fourth quarter common stock dividend in half to $0.25 per share and hold back on repurchasing some delinquent loans. All of the recent moves appear to be an effort to maintain capital.

In other secondary marketing news, due diligence provider MDMC announced it completed its first delivery of almost 5,000 reverse mortgage loans for over $500 million to a GSE.

“We are also beginning work on a reverse delivery to another GSE,” MDMC Portfolio Analyst David Custer said in the statement. “A number of the loans in both portfolios were also reviewed by our due diligence team.”

MDMC said it provides a number of mortgage loan analysis services for both servicing and loan portfolios, including agency delivery services and on-site due diligence reviews.


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

e-mail: mtgsam@aol.com

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