Fannie Mae (FNMA)

[navycmdr]

In Senate Hearing, Community Lenders Fight for Secondary Market Access, the ‘Cash Window’

By Carisa Chappell ... [e-mail]

Although reform of the government-sponsored enterprises is highly unlikely this year, community lenders went to Capitol Hill this week, testifying that equal opportunity in the secondary market and preserving the cash window are sacred tenets that cannot be compromised.

At a GSE reform hearing, Sen. Mike Crapo, R-ID, chairman of the Senate Banking Committee, called small lenders “fixtures in their communities” with local knowledge and expertise. “As we prepare to reform the system we must understand how small lenders access the market,” he said.

Many community lenders access the secondary market through securitization, but quite a few also use the “cash window,” where they sell whole loans directly to Fannie Mae and Freddie Mac.

By giving small lenders the option to sell individual loans, or pools, these shops can retain the servicing rights instead of selling the “strip” to large consolidators such as Wells Fargo and JPMorgan Chase.