Sliding Into Secondary: A Guided Approach to Entering the Market
Written by: Heather Papows, Senior Loan Servicing & Secondary Market Consultant
It’s no secret that, as most expected, this year’s new loan origination volume has been tight. And with that came tighter margins and a real struggle for some FI’s to get what they’d call their share of the market. It’s sink or swim in this day and age of lending and if you aren’t thinking two steps ahead, are you really even in the game anymore?
So what do you do to beef up your ability to offer competitive rates, without compromising on your commitment to serving your customer or member? If you haven’t already established or maintained a working relationship with the Mortgage Partnership Finance (MPF) Program, it may be the next step on your roadmap to improving profitability and increasing your competitive place in the market. As compared to becoming an approved Fannie Mae or Freddie Mac seller/servicer, there is no application fee to join the MPF program and most find the criteria to which you must adhere far less strenuous.
But not everything about becoming a member can be taken lightly. If considering a membership with MPF, it’s important to weigh all of the responsibilities that come along with this opportunity, such as:
Origination Considerations
Program and pricing setup and administration in LOS/PPE/Doc Provider
Product offering/service retained vs service released
Staff/LO/Underwriter training
Lock desk/commitment management
Loan delivery staffing and training
QC requirements
Policy and procedure maintenance
Servicing Considerations
Setup on your core/interface for onboarding
GL and custodial account establishment
Monthly reconciliation requirements
Scheduled/Actual vs Actual/Actual remittance types
Document custodian requirements
Daily and Monthly reporting requirements
Loss Mitigation/Default Management
Many of these functions are likely already in place in your institution, and merely need the proper guidance to amend or enhance to meet the ever-growing needs of the secondary market. Others may require adds to staff, adjustments to job descriptions, or outsourcing functionality. In any case, it requires a calculated approach involving planning, budgeting, and much coordination. Spillane Consulting Associates can provide you with the support you need to establish this or any other strategic opportunity for growing your residential lending performance. The team at SCA is composed of experts in every aspect of lending, putting you in perfect position to leverage our experience with your needs. If you are considering the idea of joining the MPF program, or pondering instead a relationship with Fannie or Freddie, let us guide you through the process and set you up for success from the start.
For more information on how SCA can support you in this process, please contact Bill Dolan, Director, at WDolan@scapartnering.com or by phone at (617) 694-2617.
