This topic provides the steps entailed and the information the lender must provide to Fannie Mae prior to the security settlement date, including:
When a lender sells MBS through the Capital Markets Pricing and Sales Desk, it must call the Desk to verify trade details no later than 3:00 p.m. (Eastern time) two business days before the settlement date. This is called the notification date.
If a lender needs to make any corrections or cancellations, it must call before 12:15 p.m. (Eastern time) on the notification date to ensure that delivery can take place within two business days. If the call is received after this time, the delivery cannot take place until three business days after the notification date.
Fannie Mae will accept a fax transmission of the trade details as long as the lender notifies the Desk in advance about the pending transmission and the transmission is received by 3:00 p.m. (Eastern time) on the notification date. See Capital Markets Operations Collateral Management for fax number information E-1-03, List of Contacts.
After the change or deletion of the payee code has been made, Fannie Mae mails the lender a list of its outstanding payee arrangements.
|MBS pool number and the related CUSIP number|
|Original pool balance (which is the face amount of the security)|
|Pass-through rate (which is the “coupon” rate of interest that will be paid to the investor)|
|Price (which is the dollar amount paid for the MBS)|
|Trade date (which is the date on which the parties agree to the terms of the transaction)|
|Settlement date (which is the date that the parties agreed the transfer of the securities and the payment of the purchase price would take place)|
|Issue date (which is the first day of the month in which the securities backed by the pool are issued)|
|Any unique pool specifications (such as a Fannie Majors)|
There may be some instances in which Fannie Mae requires a pool that is seasoned for two or fewer years to be treated as a “seasoned” pool. When this occurs, Fannie Mae will inform the lender during the oral confirmation of the trade. For any pool that is treated as a “seasoned” pool, the lender must provide not only the information required above, but also the following additional information:
|Weighted-average maturity (which is the weighted-average of the remaining terms of the mortgages underlying the MBS as of the trade date)|
|Weighted-average coupon (which is the weighted-average of the note rates of the mortgages underlying the MBS as of the trade date)|
|Latest loan maturity (which is the maturity date of the latest maturing mortgage in the MBS)|
|Geographic concentration of the mortgages in the pool (if a concentration was specified at the time of the trade)|
ARM MBS pools are backed by ARMs of any age. For an ARM MBS pool, the lender must provide not only the information required above (and the information for a seasoned pool above, if the pool is treated as a “seasoned” pool), but also the following additional information:
|Index on which the periodic interest rate adjustments for the underlying mortgages are based|
|Periodic and lifetime interest rate caps for the underlying mortgages|
|Periodic payment caps (if any) for the underlying mortgages|
|MBS margin (which is the portion of the mortgage margin that is used to establish the pass-through rate for the pool on each interest rate change date)|
|Interest rate change date (which is the date on which the interest rates for the underlying mortgages will be adjusted)|
|Frequency of the interest rate adjustments for the underlying mortgages|
|Applicability and terms of any conversion-to-fixed-rate feature for the underlying mortgages|