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  • Writer's pictureLuana Slettedahl

GSE’s – A Strategy Discussion

Strategy Discussion – Are you ready to evaluate doing business with the GSE’s? Are you like many other lenders today where margins are razor thin and you’re looking for more revenue?

Capital Market execution is always changing and if you don’t happen to have ‘doing business with the GSE’s’ on your radar – perhaps it’s time to do so.

Options exist with the GSE’s that can enhance your loan program offerings, impact your Capital Market execution strategies, and give you the ability to manage requirements directly to that of the GSE.

Market volatility is always going to be an issue and when working with a GSE you have a direct relationship with the GSE. A lender no longer has to manage the complexity of multiple investor requirements, and standards that may be different that Fannie Mae or Freddie Mac. As a lender you now have options!

Benefits include:

  • Pricing benefits from going direct.

    • Loan level pricing adjustors are from the GSE

    • Additional risk adjustments, whether it be program overlays or pricing adjustments that can be imposed by an investor do not exist

    • Ability to run best execution between whole loan and MBS pricing

    • Ability to take advantage of loan balance ranges and pricing benefits

  • Ability to manage warehouse line turn-times

  • Delegated Underwriting

  • Options to issue a mortgage-backed security, in lieu of holding whole loans in portfolio – a MBS in liquid in the market and is an industry standard.

  • Ability to retain or sell the loan servicing asset

We find that lenders often underestimate how close they really are to being able to do business directly with the GSE’s. If you haven’t considered the GSE’s as a business partner, and want to learn more, contact Luana Slettedahl, Principal, BlackFin Group.

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