SoFi is Now a Fannie Mae Seller, Servicer
SoFi clocked in another milestone in mortgage lending by becoming an approved Fannie Mae seller and servicer.
SoFi Lending Corp, the company’s wholly owned subsidiary can, as a seller, sell mortgage loans to Fannie Mae and service loans on behalf of the Federal National Mortgage Association.
“While we launched our mortgage business focused on larger ‘jumbo’ loans, the certainty and efficiency offered by Fannie Mae will enable us to serve more members by expanding geographically and into smaller loan amounts,” said Michael Tannenbaum, VP of Mortgage at SoFi in a press release. “Sixty-five percent of SoFi’s purchase customers are first-time homeowners who have what we call a ‘millennial mindset.”
In March this year, the company was laying down the works to start a real estate trust to buy mortgages sold by the lender. According to Bloomberg, some of SoFi’s borrowers seek mortgages that are too big to be funded through Fannie Mae and Freddie Mac.
In the crowded online lending space, where customer acquisition is key, companies scramble to lock in borrowers early to keep lending to them through different life stages from student loans to auto loans to mortgages. SoFi uses the free cash flow method for mortgages, a deviation from the industry standard of debt-to-income ratio.
“There isn’t a banker out there that doesn’t look at me and shake his head and say, ‘You don’t know what you’re doing, but we’re doing it,” Cagney told Bloomberg. SoFi plans to sell $3 billion in mortgages this year.Last modified: May 4, 2016