<- Return To Featured Resources

Fannie Mae: Lender Letter LL-2019-03: Interest Rate Spread for Fixed-Rate MBS and Servicing Fee Requirements for Fixed-Rate Loans

Investor Update
March 5, 2019

Source: Fannie Mae

As we continue to prepare for the implementation of the Uniform Mortgage-Backed Security (UMBS™), the Federal Housing Finance Agency (FHFA) has instructed Fannie Mae and Freddie Mac (the GSEs) to undertake activities that promote aligned investor cash flows for their TBA-eligible mortgage-backed securities. Pursuant to FHFA’s instruction we are changing the allowable interest (note) rate spread in fixed-rate MBS and changing the maximum servicing fee permitted for fixed-rate loans.

Interest Rate Spread
For most fixed-rate loans the maximum allowable interest rate is 250 basis points above the pool’s pass-through-rate. We are updating this policy to limit the interest rate for each fixed-rate loan in a pool to no more than 112.5 basis points above the pass-through rate of the pool.

This updated policy is effective for loans delivered into pools with issue dates on or after June 1, 2019.

FHFA has instructed the GSEs to monitor the weighted-average coupon (WAC) of MBS and take actions as appropriate such that MBS WAC would be generally consistent with historical WAC levels. FHFA and the GSEs are working to determine an appropriate target MBS WAC, such as 80 bps or slightly higher (given current guaranty fees and minimum servicing levels).

Servicing Fee
We are updating our servicing fee policies to limit the servicing fee to a maximum of 50 basis points for all fixed-rate loans delivered to us. In other words, the maximum servicing fee shall not be more than 25 basis points above the standard 25 basis point servicing fee. The 50-basis point maximum is inclusive of any lender-paid mortgage insurance (LPMI) premium.

This updated policy is effective for whole loans delivered, and loans delivered into pools with issue dates, on or after June 1, 2019.

NOTE: We will publish these changes in the Selling and Servicing Guides in future updates.

Lenders who have questions about this Lender Letter should contact their Fannie Mae account team.

Carlos T. Perez
Senior Vice President and
Chief Credit Officer for Single-Family

CEO

Alan Jaffa

Alan Jaffa is the Chief Executive Officer for Safeguard Properties, steering the company as the mortgage field services industry leader. He also serves on the board of advisors for SCG Partners, a middle-market private equity fund focused on diversifying and expanding Safeguard Properties’ business model into complimentary markets.

Alan joined Safeguard in 1995, learning the business from the ground up. He was promoted to Chief Operating Officer in 2002, and was named CEO in May 2010. His hands-on experience has given him unique insights as a leader to innovate, improve and strengthen Safeguard’s processes to assure that the company adheres to the highest standards of quality and customer service.

Under Alan’s leadership, Safeguard has grown significantly with strategies that have included new and expanded services, technology investments that deliver higher quality and greater efficiency to clients, and strategic acquisitions. He takes a team approach to process improvement, involving staff at all levels of the organization to address issues, brainstorm solutions, and identify new and better ways to serve clients.

In 2008, Alan was recognized by Crain’s Cleveland Business in its annual “40-Under-40” profile of young leaders. He also was named a NEO Ernst & Young Entrepreneur Of The Year® Award finalist in 2013.

Esq., General Counsel and EVP

Linda Erkkila

Linda Erkkila is the General Counsel and Executive Vice President for Safeguard Properties, with oversight of legal, human resources, training, and compliance. Linda’s broad scope of oversight covers regulatory issues that impact Safeguard’s operations, risk mitigation, strategic planning, human resources and training initiatives, compliance, insurance, litigation and claims management, and counsel related to mergers, acquisition and joint ventures.

Linda assures that Safeguard’s strategic initiatives align with its resources, leverage opportunities across the company, and contemplate compliance mandates. She has practiced law for 25 years and her experience, both as outside and in-house counsel, covers a wide range of corporate matters, including regulatory disclosure, corporate governance compliance, risk assessment, compensation and benefits, litigation management, and mergers and acquisitions.

Linda earned her JD at Cleveland-Marshall College of Law. She holds a degree in economics from Miami University and an MBA. Linda was previously named as both a “Woman of Influence” by HousingWire and as a “Leading Lady” by MReport.

COO

Michael Greenbaum

Michael Greenbaum is the Chief Operating Officer of Safeguard Properties, where he has played a pivotal role since joining the company in July 2010. Initially brought on as Vice President of REO, Mike’s exceptional leadership and strategic vision quickly propelled him to Vice President of Operations in 2013, and ultimately to COO in 2015. Over his 14-year tenure at Safeguard, Mike has been instrumental in driving change and fostering innovation within the Property Preservation sector, consistently delivering excellence and becoming a trusted partner to clients and investors.

A distinguished graduate of the United States Military Academy at West Point, Mike earned a degree in Quantitative Economics. Following his graduation, he served in the U.S. Army’s Ordnance Branch, where he specialized in supply chain management. Before his tenure at Safeguard, Mike honed his expertise by managing global supply chains for 13 years, leveraging his military and civilian experience to lead with precision and efficacy.

CFO

Joe Iafigliola

Joe Iafigliola is the Chief Financial Officer for Safeguard Properties. Joe is responsible for the Control, Quality Assurance, Business Development, Marketing, Accounting, and Information Security departments. At the core of his responsibilities is the drive to ensure that Safeguard’s focus remains rooted in Customer Service = Resolution. Through his executive leadership role, he actively supports SGPNOW.com, an on-demand service geared towards real estate and property management professionals as well as individual home owners in need of inspection and property preservation services. Joe is also an integral force behind Compliance Connections, a branch of Safeguard Properties that allows code enforcement professionals to report violations at properties that can then be addressed by the Safeguard vendor network. Compliance Connections also researches and shares vacant property ordinance information with Safeguard clients.

Joe has an MBA from The Weatherhead School of Management at Case Western Reserve University, is a Certified Management Accountant (CMA), and holds a bachelor’s degree from The Ohio State University’s Honors Accounting program.

Business Development

Carrie Tackett

Business Development Safeguard Properties