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Converting an Unfunded Cash Forward Commitment to a Permanent MBS

Converting an Unfunded Cash Forward Commitment to a Permanent MBS

In an effort to develop a greater offering of MBS eligible products, an Unfunded Cash Forward Commitment can be converted to a permanent MBS.

The following steps provide an overview of the processes needed to convert an Unfunded Cash Forward Commitment  to a permanent MBS:

  1. Obtain approval from Credit Risk Management to convert your Unfunded Cash Forward Commitment to a permanent MBS.
  2. An authorized trader for your lending organization must contact the Multifamily Desk (Desk) to create an MBS ticket at least 3 business days prior to closing with the borrower. Upon calling, the Desk will confirm the details of the Cash Forward converting and Settlement Date/Book Entry Date of the MBS.  
    The authorized trader must also send an e-mail to the Desk with conversion confirmation and settlement information for inclusion in the trade package.
  3. Perform the following activities by 9:00 am at least 3 Business Days prior to closing with the borrower:
    • Create a permanent Cash Commitment
      To do so, access the Unfunded Cash Forward Commitment in C&D™.  Click the “Convert to Permanent” button on the Commitment page to create a permanent Cash Commitment. A new permanent Commitment Number will be generated.
        
  • MF-CashForwardCommitmentGraphic-527x275.png


    Click Save to save the Commitment, but do not submit it. 
      

  • MF-CashCommitmentGraphic-525x156.png
  • Send an e-mail to the Forwards team mailbox ([email protected]) notifying your Fannie Mae Analyst that your Cash Forward Commitment is converting to a permanent MBS.  
  • Send your pre-conversion package via e-mail to the Forwards team mailbox ([email protected]). This package includes the notice of conversion and any releases.
  • Your Fannie Mae Analyst will:
    • Access C&D to retrieve the permanent Commitment that has been created.
    • Complete a system request to change the permanent Commitment execution type from Cash to MBS.
    • Obtain approval for the system request from an Acquisitions Director prior to submitting it to the DBA (Data Base Administrator).
  • The DBA notifies your Fannie Mae Analyst when the system request is completed.
  • Fannie Mae will contact you for confirmation to complete the submission of the new MBS Commitment.

  •  Complete the following additional fields on the permanent Commitment page of C&D:

    • Fannie Mae Pre-Review (yes)
    • Special Disclosure (SD)
      (if yes, complete SD comments, SD Seller Contact Name and SD Seller Contact E-mail)
    • Trader (Investor)
    • Investor Price (%)
    • Guaranty Fee Rate (%)
    • Date of Trade (mm/dd/yyyy)
    • Original Book Entry Date

      

MF-SetupCommitmentFormGraphic-528x1037.png
  • Submit the permanent Commitment for confirmation in C&D.
  • Perform the following activities after closing with the borrower at least 7 business days prior to the desired Book Entry Date:
    • Enter additional required data (i.e. Mortgage Loan, participant, collateral, underwriting and financing/pool data) into C&D and address any system edits (warnings, overrideable and non-overrideable).
    • Submit pool for securitization.
    • Deliver documents to Fannie Mae Multifamily Certification & Custody team (DDF).
    • Upload underwriting documents to MultidocExpress™.
  • The Fannie Mae Certification team reviews documents and data for certification.
  • The Fannie Mae Disclosure Team reviews the Underwriter’s Data Form (Form 4662) and data for approval.
  • Fannie Mae closes the MBS pool to issue the security on the desired Book Entry Date.

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