Freddie Mac has formally announced a new pilot program designed to help the company's seller/servicer affiliates obtain warehouse lines of credit with participating warehouse lenders.
The initiative aids single-family and multifamily lenders in finding adequate warehouse lines of credit to fund loans for sale to Freddie Mac. Freddie Mac currently is working with warehouse lender NattyMac, a Guggenheim Partners company, in the pilot program.
‘The warehouse lending industry has nearly exited the market, making it increasingly difficult for lenders to fund loans,’ says Charles E. Haldeman Jr., CEO for Freddie Mac. "We're proud to help bring much-needed additional liquidity to the residential and apartment financing community."
Freddie Mac will provide participating warehouse lenders with standby commitments to purchase qualifying loans in the event a Freddie Mac seller/servicer cannot meet its contract obligations or fails. Pre-funding reviews are required, and normal Freddie Mac purchase and origination processes and procedures apply.
Consistent with its charter and without objection from its regulator, the Federal Housing Finance Agency, Freddie Mac is providing this standby purchase commitment arrangement with NattyMac as part of the pilot program. Media reports from last week indicate that California-based lender Provident Funding Associates LP had already been working with Freddie Mac and NattyMac in the initial stages of the pilot program.
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 company says. 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 Mac.
SOURCE: Freddie Mac