As a Fannie Mae Seller/Servicer, are we responsible for the actions of our third-party originators (i.e. brokers and correspondents)?
In a word, yes.
Third-party originations refers to the process of mortgage loans being completely or partially originated, processed, underwritten, packaged, funded, and/or closed by an entity other than the seller (or its parent, affiliate, or subsidiary) of the loan to Fannie Mae. This includes mortgage brokers and correspondent lenders, which are known as third-party originators (TPOs).
In its recently released list of Seller/Servicer Risk Self-Assessments, Fannie Mae reminds sellers that they remain fully responsible to Fannie Mae for functions that are outsourced to third parties. A seller must have effective written policies and procedures for the approval and management of TPOs and must satisfy itself that all TPOs produce quality loans. The 13 required items include: