Mortgage giant Freddie Mac (FRE)
selected asset manager and securities servicer Bank of New York Mellon (BK)
as custodian for documents related to its single-family mortgage business, effectively outsourcing the role after a three-month transfer period.
As of October 1, BNY Mellon will begin receiving, reviewing and certifying documents for single-family residential mortgages delivered to Freddie. The company also takes on custodial services for other documents within Freddie's custody.
"As the country's leading player in providing mortgage custody and loan level support services, we have the capacity and expertise to handle Freddie Mac's custody needs as it works on mortgage solutions with its lenders," says Patrick Tadie, executive vice president and head of global structured credit at BNY Mellon, in a media statement
Tadie adds: "This mandate from one of the country's major buyers of mortgage loans reflects our leadership role in and dedication to supporting the government space."
BNY Mellon's document custody services on mortgage loan files are based in its New York, California and Texas centers -- the latter of which is where Freddie's documents will be held.
Freddie announced the appointment in a bulletin Tuesday
, capping a month of good news for the bank.
on June 18 upgraded BNY Mellon’s US residential servicer rating to “RMS1? from “RMS1? minus. It rates servicers on a scale from one to five, with one raking the highest. Days before the upgrade, the Federal Reserve Board
announced the termination of an enforcement action
taken in 2006 against the Bank of New York, which merged with Mellon Financial in 2007 to form the company as it stands today.
BNY Mellon is intimately involved in the one of the government’s key liquidity programs, the Troubled Asset Relief Program. In October, the firm was hired as custodian
of the TARP, where it would manage accounting and administrative duties.
Write to Diana Golobay
Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.