Sell

Selling a mortgage loan in the secondary market typically occurs through registered dealers who match originators with investors. Transactions follow ISLA or SIFMA conventions, using standardized trade confirmations that specify loan characteristics, price, settlement date, and delivery mechanics. Sellers often use pool-level or ceiling/floor pricing to hedge interest rate risk before executing the sale. The loan package is transmitted digitally via platforms like MBSLink or Encompass using XML or fixed-format files aligned with Ginnie Mae or Fannie Mae specifications.

Dealer-to-dealer trades rely on bilateral agreements and custodial arrangements, often using The Depository Trust Company for settlement. In dealer-to-investor transactions, the dealer may provide best-execution quotes after querying multiple institutional buyers. Pricing reflects loan attributes like coupon, origination date, credit enhancement, and prepayment assumptions. All parties rely on Uniform Single Attestation Protocol for Mortgage Loans for file integrity and audit trails.

Post-trade tasks include confirming delivery of loan files, verifying servicing transfer notices, and updating custodial records. Sellers must deliver a clean title free of liens or encumbrances, and representations and warranties—like those under the Uniform Standard Representations and Warranties—must be met or cured within defined timeframes. Failure to meet these obligations can trigger buybacks, indemnities, or reserve requirements imposed by GSEs or private investors.