ACB Renews Partnerships with GSEs and Countrywide

America's Community Bankers has renewed its secondary mortgage market partnerships with Fannie Mae, Freddie Mac and Countrywide Home Loans.

Now in its fourth year, the pact with Fannie Mae is the cornerstone of the ACB's mortgage solutions program, which is designed to allow community banks to provide their customers with loan options they might not otherwise be able to offer.

The alliances with Freddie Mac are in its third year, as is the arrangement with Countrywide, which offers members an outlet for nonconforming loans.

The partnerships mean that "community banks will never have to turn away a qualified borrower," Curtis Hage, chairman of ACB Business Partners Inc., the subsidiary which runs the initiative, said here last week at the group's annual National Real Estate Lending Conference.

Since the program's inception in 2001, ACB members have delivered more than $50 billion in mortgages to the three partners, the association said.

"Through the negotiating power of ACB," said Mr. Hage, chairman of Home Federal Bank, Sioux Falls, S.D., and a former ACB chairman, participants "have collectively accrued bottom-line value of more than $85 million."

The group also has arrangements with Principal Residential Mortgage and Financial Freedom Senior Funding Corp. as outlets for nonconforming loans and reverse mortgages, respectively.

At the conference, Michael May, senior vice president of mortgage sourcing, operations and funding at Freddie Mac, and Fannie Mae vice chairman Daniel Mudd hailed their arrangements with the ACB.

Mr. May said the alliance represents a "true alignment" of Freddie Mac and ACB's goals and principles.

Community banks "are central to our success," he said of what he called "the new" Freddie Mac. "And we're 100% committed to your success."

Mr. Mudd said his company's affiliation with ACB has been "a big success" for the two organizations.

"Because of the affinity partnership, more community banks are able to replenish their supplies of mortgage capital to make more loans in their service areas," he said.

A decade ago, less than half of ACB's members were selling loans into the secondary market, according to the Fannie Mae official. Now, "that figure is north of 75% - and growing every year."

Mr. Mudd reported that during the first three years of the Fannie Mae-ACB partnership, 174 members have signed on as participants. And he said that deliveries last year were up by 14%.

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