Whole Loan Purchase Review Service for Housing Finance Agencies (HFA)
MetaSource Mortgage leads the mortgage industry in defining best practices for investor whole loan purchase reviews (WLPR). With a keen eye on ultimate salability, our holistic WLPR protocols address investors' dual objectives: to purchase quality loan product and to manage productive relationships with their correspondents.
Our WLPR service enables the HFA business model to add or transform from a seller/servicer whole loan shop to a mortgage backed security shop, adding higher levels of control to revenue procurement. Our WLPR service has the power to improve the revenue-generating capability of an HFA's secondary operations. This lowers the cost of financing to borrowers and creates an environment to support affordable housing goals for their communities.
In the current market, many of our HFAs are challenged by the contraction in vital investment funds, and are exploring new ways of leveraging their superior loan performance to attract alternative funding models. Partnering with us for WLPR provides consistent, transparent loan quality analysis for risk mitigation that supports the courting of investor confidence in the HFA products.
Benefits for HFAs
Our WLPR service delivers the following:
- Improves internal processes
- Increases production efficiencies
- Enables best business practices
- Offers flexibility and scalability
- Boosts overall loan quality
- Minimizes administrative functions
- Provides a best in class web-based, work-flow management software platform
Standard HFA revenue procedures, for instance, include retaining ideal loans for portfolio performance or for servicing revenue. Our WLPR service can facilitate surgically precise selections from the HFAs' growing pool of premium loans. Ultimately, our WLPR service allows for the sale of mortgage-backed securities (MBS) to private investors when loan volume is escalated to an acceptable secondary market volume.
"As mortgage lenders are aware, Fannie Mae has been phasing in various components of its Loan Quality Initiative ("LQI") with the express purpose of improving the overall quality of loans being delivered and thus ensuring data integrity, compliance with credit and eligibility standards, and mitigating repurchase risk (pg 10)."
— Home Ownership News, Executive Summary, Massachusetts Housing Finance Agency
Engaging our WLPR services allows HFAs to be more successful in the conventional market, delivering direct to government-sponsored entities FNMA, FHLMC, and GNMA. Our WLPR service also offers purchasing investors the confidence to explore new funding sources through private securitization in a transparent, well-regulated, compliance-centric environment – a market poised for innovation in a post-GSE era.
Risk Mitigation for Changing Market Conditions
Thus, the option to securitize HFA loans directly with Wall Street becomes a viable, risk-controlled option and can potentially widen margins of return. The HFA can operate as a "mini-GSE," dictating restrictions and loan qualifications to lenders as desired and obtain optimal pricing for loan pools. With MetaSource Mortgage as a business partner, HFAs stay abreast of changing market conditions without having to conform to a "one size fits all" standard of risk mitigation.
Restoring Investor Confidence
MetaSource Mortgage WLPR executes our clients' strategy to ensure that discrepancies and deficiencies, as they relate to documentation, compliance, insuring and the sale and/or boarding for servicing of a loan, have been identified and corrected as necessary prior to actual funding/purchase.
Our WLPR service verifies loan quality both pre-funding and prior to purchase. Our standards and requirements are customized either to the investor and/or to the end purchaser. Our WLPR service helps to insulate our clients from purchasing mortgage loans with significant salability defects, including, but not limited to:
- Documentation discrepancies
- Compliance deficiencies
- Data inaccuracies
The MetaSource Mortgage WLPR advantage stems from our deep understanding of salability issues, derived from long-term experience with a broad swath of investors, warehouse lenders, and geographic footprints.
Our WLPR service offers the critical benefits of asset protection, salability-compliance correction, and a more efficient loan purchase process. WLPR will generate an accredited pool of higher quality loans that will perform in a more profitable manner; and this can open the doors to provide support for a new, aggressive securitization business model.
Innovative Solutions Practically Applied
In 2010, MassHousing selected MetaSource Mortgage (formerly Titan Lenders Corp.) to provide outsourced whole loan purchase review services. We created a seamless, transparent loan review workflow that met both regulatory and investor criteria, while accommodating unique HFA lending criteria in a paperless, web-based environment accessible to all participating parties.
Due to the technology innovation provided to MassHousing, MetaSource Mortgage was named one of three finalists for the coveted 2010 Synergy Award. The award issued by Source Media's Mortgage Technology magazine "recognizes technology initiatives and alliances that show exemplary interoperability in a production setting to advance the cause of automation and e-commerce."