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Fannie Pledges $1bn to Guggenheim Partners Warehouse Lender

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As HousingWire reports in Monday Morning Cup of Coffee, government-sponsored entity (GSE) Fannie Mae (FNM) pledged its support to the mortgage warehouse operations of New York-based global financial services firm Guggenheim Partners. Fannie provided NattyMac, Guggenheim's mortgage warehouse lending subsidiary, with a $1bn warehouse credit line under the initiative, a spokesperson confirmed to HousingWire on Monday. "In this market, lenders who rely on warehouse funding are struggling to sell their loans and replenish their funds in a timely way," said Fannie president and CEO Michael Williams. "We are taking action now to help fill the gap by providing $1bn of critical liquidity targeted at smaller lenders across the country." Fannie's agreement will apply to third-party originations by NattyMac's mortgage banking clients. St. Petersburg, Fla.-based NattyMac specializes on financing prime mortgage collateral, like agency-eligible and government-insured or -guaranteed loans. NattyMac already enjoys a similar arrangement with the other GSE, Freddie Mac (FRE). Freddie announced in early October its pilot program to provide standby commitments to purchase qualifying loans in the event a seller/servicer either cannot meet its contract obligations or fails. NattyMac was one of the first warehouse lenders to sign on to Freddie's program. “The warehouse lending industry has nearly exited the market making it increasingly difficult for lenders to fund loans,” said Freddie Mac CEO Charles Haldeman Jr. The warehouse guarantee program will “provide a certain measure of comfort” to warehouse lenders who provide lines of credit to smaller lenders to originate mortgages, a source told HousingWire in October. For example, if a mortgage banker were to go out of business with loans sitting in the warehouse lender's pipeline, the GSE still purchases the loans through their previous agreement. This commitment is designed to reduce the risk warehouse lenders face when extending short-term credit to smaller lenders. Write to Diana Golobay. Disclosure: The author holds no relevant investment positions.

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