The requirements stated below, unless waived by Pennymac at its sole and absolute discretion, must be met by lenders in order to be eligible for participation in the Pennymac Non-Delegated Seller Program.
Pennymac reserves the right, in its sole discretion, to determine whether a prospective Seller customer meets these eligibility requirements. Once approved, customers are required to maintain the eligibility requirements. If a customer fails to maintain one or more of the eligibility requirements, Pennymac may suspend purchasing mortgage loans from the customer and/or terminate its business relationship with the customer.
The Seller must have been an active originator of first lien, investment quality residential mortgage loans using Fannie Mae’s Desktop Underwriter AUS engine during the previous two years.
The Seller must have adequate facilities with which to originate first lien residential mortgage loans.
- The Seller must follow generally accepted mortgage lending practices with respect to its mortgage loan origination activities.
- The Seller must be an organization which is committed to, and engages in, responsible lending practices.
The Seller and the Seller’s parent corporation, if any, must meet the capital requirements of each state and federal regulatory agency with jurisdiction over any of the Seller’s or parent corporation’s activities, as applicable. Generally, Pennymac requires a Tangible Net Worth of $250K, 20% Liquidity and <15 leverage.
- The Seller must be duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and qualified to transact business and properly licensed in each jurisdiction where it originates or services mortgage loans.
- The Seller must be in good standing with all applicable regulatory authorities and not subject to any extraordinary supervision of its operations.
- The Seller must have the power and authority to enter into the Pennymac Seller Loan Purchase Agreement.
- The Seller’s compliance with the terms and conditions of the Agreement, including the terms and conditions of this Manual, must not violate any of the provisions of its articles of incorporation, charter or by-laws or any other instrument relating to the conduct of the Seller’s business, the ownership of its property or any other agreement to which it is a party or by which it is bound.
The Seller must possess and maintain all required licenses necessary to conduct it’s activities in each jurisdiction in which any mortgaged property is located or otherwise be exempt from such requirements.
Sellers that are not federally insured must maintain a blanket fidelity bond and errors and omissions insurance coverage in the amount of $300,000 each. The deductible may not exceed the greater of $100,000 or 5% of the face amount of the bond.
Product Specific Approvals
In accordance with the VA Lenders’ Handbook, a non-delegated Seller may only submit a commitment for a VA loan once Pennymac confirms the VA formally recognized the principal-agent relationship between the two parties.
For non-delegated Sellers with unconditional direct endorsement (DE) authority:
- Seller must designate Pennymac as an authorized agent in the LEAP.
- Pennymac will act as an authorized agent and underwrite the Mortgage Loan.
- Pennymac will be responsible for submitting the Mortgage Loan for endorsement
For non-delegated Sellers without DE authority, the Seller will act as a sponsored TPO in accordance with the FHA Single Family Housing Policy Handbook and must be registered on the Sponsored Originator Maintenance screen in FHA Connection.
In requesting FHA approval, Seller represents that it meets all state license, registration, or equivalent approval requirements.