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

  4. 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).
  5. The DBA notifies your Fannie Mae Analyst when the system request is completed.
  6. Fannie Mae will contact you for confirmation to complete the submission of the new MBS Commitment.
  7.  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
  8. Submit the permanent Commitment for confirmation in C&D.
  9. 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™.
  10. The Fannie Mae Certification team reviews documents and data for certification.
  11. The Fannie Mae Disclosure Team reviews the Underwriter’s Data Form (Form 4662) and data for approval.
  12. Fannie Mae closes the MBS pool to issue the security on the desired Book Entry Date.

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