Freddie Comes to the Aid of Warehouse Market

Freddie Mac said it will give a boost to the struggling warehouse lending market by providing standby commitments to purchase qualifying loans in the event a seller/servicer cannot meet its funding obligations or fails. A source close to the situation told National Mortgage News that the GSE has been operating a version of this pilot program since June. The participating warehouse provider in that program is Natty Mac of Florida. (The lender is Provident Funding Associates of Burlingame, Calif.) Freddie said pre-funding reviews are required. Fannie Mae is working on a similar program. "The warehouse lending industry has nearly exited the market making it increasingly difficult for lenders to fund loans," said Freddie CEO Charles E. Haldeman. "We're proud to help bring much-needed additional liquidity to the residential and apartment financing community." The GSE noted that seller/servicers interested and that qualify for the program will need to enter into a separate agreement directly with the participating warehouse lender. 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. Fannie's pilot program is expected to be slightly different.