We do not believe that Fannie or Freddie’s rules directly impose any quality control requirements on your bank, as it would be considered a third-party originator. (The Fannie Mae Selling Guide defines a as third-party origination as “any mortgage that is completely or partially originated, processed, underwritten, packaged, funded, or closed by an entity other than the lender that sells the mortgage to Fannie Mae, such as a mortgage broker.”)

The Fannie Mae Guide goes on to state that “[t]he lender is responsible for ensuring that any mortgages originated and processed by third parties that it sells to Fannie Mae meet Fannie Mae’s eligibility criteria and are originated in a sound manner.” Because you do not have any contractual privity with Fannie or Freddie, and because Fannie and Freddie impose quality control requirements only on the lender, we believe that a third-party originator would not be required to undertake any quality control responsibilities (if not required by your contract with the lenders).