source:
  type: guide
  id: fnma-sel-c3-7-01
  authority: Fannie Mae Selling Guide C3-7-01 — Establishing an MBS Trading Account
  description: Fannie Mae Selling Guide C3-7-01 — Establishing an MBS Trading Account.
  coverage_tier: operative
obligations:
- id: fnma-sel-c3-7-01-full
  canonical_id: fnma-sel-c3-7-01-full
  section: Fannie Mae Selling Guide C3-7-01 — Establishing an MBS Trading Account
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide C3-7-01 — Establishing an MBS Trading Account
    source_class: fnma-guide
    source_url: https://singlefamily.fanniemae.com/media/document/pdf/selling-guide
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-05-25T14:09:57Z'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: 'C3-7-01, Establishing an MBS Trading Account (10/06/2021) Introduction
      This topic provides information on establishing an MBS trading account, including:
      Process Used to Establish a Trading Account Requirements and Terms Governing
      the Trading Account Terms and Conditions Governing Use of the Electronic Trading
      Platform Establishment of Trading Limits and Margin Requirements Oﬀsetting Price
      Diﬀerentials Designated Threshold Amount and Minimum Transfer Amount Default
      of Lender Under the Terms of Trading Account Consequences of a Default Remedies
      for the Default of a Lender’s Trading Account Suitability and Risk of Loss Transactional
      Intent of the Lender and Fannie Mae Process Used to Establish a Trading Account
      The table below describes the stages to establish a trading account. Stage Description
      1 To establish a trading account, the lender may call the Capital Markets Pricing
      and Sales Desk. See E-1-02, List of Contacts. 2 Each lender must provide the
      following information: • either a corporate resolution from its board of directors
      or an oﬃcer’s certiﬁcate to indicate its authority to establish a trading account
      with the Capital Markets Pricing and Sales Desk; and • the names of the designated
      individuals who will be authorized to sell securities to, or to buy them from,
      the Capital Markets Pricing and Sales Desk and the limit of their authority
      (if any). Published May 6, 2026 1011 Stage Description 3 Each lender must provide
      an address that can be used for all oﬃcial notices and communications sent to
      the lender, and wiring instructions for the diﬀerent types of payments Fannie
      Mae makes to the lender. 4 The lender must continue to provide updates about
      any changes to its authority to perform under the trading account, the individuals
      authorized to transact business with the Capital Markets Pricing and Sales Desk
      (or their limits of authority), and the lender’s address or wiring instructions.
      Requirements and Terms Governing the Trading Account A lender’s trading account
      is governed by the terms of its Mortgage Selling and Servicing Contract (MSSC),
      the provisions of this Guide and any special instructions provided for in a
      speciﬁc trade conﬁrmation or settlement notice. By initiating trade activity
      with the Capital Markets Pricing and Sales Desk, lenders agree to adhere to
      Fannie Mae’s guidelines for selling securities and to SIFMA''s Uniform Practices
      for the Clearance and Settlement of Mortgage-Backed Securities and Other Related
      Securities, including any amendments to either. Should there be a conﬂict between
      the requirements in this Guide and the SIFMA provisions, the requirements of
      this Guide take precedence. As security for payment of its obligations and liabilities
      under its trading account, the lender grants Fannie Mae a ﬁrst priority security
      interest in any and all of its right, title, and interest in its securities,
      money, or other property that is held for (or by) Fannie Mae. If appropriate
      authorities require the ﬁling of a ﬁnancing statement to evidence this security
      interest, the lender must execute and deliver any legal instruments required
      to protect or perfect Fannie Mae’s security interest. Terms and Conditions Governing
      Use of the Electronic Trading Platform By accessing Fannie Mae’s electronic
      trading platform, currently known as the MBS Trading Portal, the lender agrees
      that the platform will be a “Licensed Application,” as deﬁned in the Software
      Subscription Agreement General Terms and Conditions. See the Consolidated Technology
      Guide. The lender also agrees that it is subject to the General Terms and Conditions,
      and that the following additional terms apply. Authorized User For purposes
      of the electronic trading platform, the term “Authorized User” includes individuals:
      working for Third-Party Providers retained by the lender to perform mortgage-related
      services requiring access to the Licensed Application on the lender’s behalf
      or third-party originators (such as mortgage brokers or correspondents that
      are aﬃliated with lender) that require access to the Licensed Application; and
      who have obtained Authentication Credentials as a result of the lender’s actions.
      Published May 6, 2026 1012 The lender agrees that actions of Authorized Users
      are deemed to be actions of the lender. Evidence of a Trade The Licensed Application’s
      conﬁrmation of a trade as “Accepted,” together with the Selling Guide and any
      applicable MBS trading agreement between lender and Fannie Mae, the conclusive
      evidence of a trade and the terms between Fannie Mae and lender with respect
      to the trade described in the conﬁrmation. Indicative Pricing If indicative
      pricing is displayed to the lender, the lender acknowledges and understands
      that such pricing is not the actual pricing and is subject to increase or decrease
      prior to acceptance of the trade. Termination of Relationships Fannie Mae reserves
      the right to immediately suspend or terminate any relationship established between
      a lender and a third party by and for the Licensed Application at any time,
      in its sole discretion. Establishment of Trading Limits and Margin Requirements
      When Fannie Mae establishes a trading account for a lender, it may establish
      trading limits, margin requirements, a designated threshold amount, and a minimum
      transfer amount speciﬁc to a lender. After a trading account is established
      for a lender, Fannie Mae may: amend or cancel any trading limits, margin requirements,
      designated threshold amounts, or minimum transfer amounts initially imposed
      on a lender’s trading accounts; and decline to engage in any speciﬁc transaction
      with the lender. Oﬀsetting Price Diﬀerentials Subject to the applicable designated
      threshold amount and minimum transfer amount (deﬁned below), a lender and Fannie
      Mae may elect to exchange variation margin if there is a price diﬀerential on
      the lender’s open (unsettled) trades with Fannie Mae. A price diﬀerential exists
      if, at any time, with respect to a lender’s open trades with the Capital Markets
      Pricing and Sales Desk, either party would incur a loss if it canceled the open
      trades and entered into replacement transactions (i.e., there is a diﬀerence
      between the current market price and the settlement price of the open trades).
      If a price diﬀerential exists, the party that would receive positive income
      from the cancellation of the open trades and entry into replacement transactions
      is “in the money,” and the party that would incur a cost from the cancellation
      of the open trades and entry into replacement transactions is “out of the money.”
      If there is a negative price diﬀerential for a lender’s open trades with the
      Capital Markets Pricing and Sales Desk (i.e., on any trading day, the lender
      is “out of the money” with regard to the securities it has contracted to purchase
      or sell to Fannie Mae), then Fannie Mae may request that the lender wire cash
      to Fannie Mae, subject to the lender’s designated threshold amount and minimum
      transfer amount. If there is a positive price diﬀerential for a lender’s open
      trades with the Capital Markets Pricing and Sales Desk (i.e., on any trading
      day, the lender is “in the money” with regard to the securities the lender has
      contracted to purchase or sell to Fannie Mae), then the lender may request that
      Fannie Mae wire cash to the lender, subject to Fannie Mae’s designated threshold
      amount and minimum transfer amount. Published May 6, 2026 1013 When calculating
      the price diﬀerential: any open trades between the lender and the Capital Markets
      Pricing and Sales Desk will be disregarded if they have been assigned, submitted,
      transferred, or reported to a securities clearing organization (e.g., the Fixed
      Income Clearing Corporation) for clearing, netting, and/or settlement such that
      the open trade will be factored into the applicable margin requirements of such
      securities clearing organization; and any outstanding pair-oﬀ fees relating
      to trades between the lender and the Capital Markets Pricing and Sales Desk
      will be factored into the calculation of the price diﬀerential. Designated Threshold
      Amount and Minimum Transfer Amount The designated threshold amount represents
      a level of unsecured exposure an “in the money” party will accept before making
      a margin call on the “out of the money” party. Fannie Mae’s designated threshold
      amount and a lender’s designated threshold amount shall each be $3,000,000,
      unless otherwise agreed to by the parties in writing and/or subject to the occurrence
      of a triggering event as discussed below. Example If there is a positive price
      diﬀerential and a lender is in the money by $3,100,000, the lender may make
      a margin call to Fannie Mae for $100,000. ($3,100,000 – Fannie Mae’s designated
      threshold amount of $3,000,000). A minimum transfer is a speciﬁed amount of
      money that must be exceeded before a margin call can be made. Fannie Mae’s minimum
      transfer amount and a lender’s minimum transfer amount shall each be $50,000,
      unless otherwise agreed to by the parties in writing and/or subject to the occurrence
      of a triggering event as discussed below. Notwithstanding the foregoing, Fannie
      Mae will not wire cash to a lender in the event of a positive price diﬀerential
      if any of the following “triggering events” has occurred with respect to a lender:
      an event of default under the Lender Contract or any other contract between
      Fannie Mae and the lender, the lender’s failure to meet any of the lender eligibility
      requirements set forth in Subpart A-4, Maintaining Lender Eligibility, a decline
      in a lender’s adjusted net worth by more than 20% over a quarterly reporting
      period or by more than 30% over two consecutive quarterly periods, the total
      unpaid principal balance of all outstanding Fannie Mae repurchase requests to
      a lender exceeds 15% of the lender’s adjusted net worth, Fannie Mae comes into
      possession of information that, in Fannie Mae’s reasonable discretion, could
      result in an adverse impact, either presently or in the future, on the lender’s
      counterparty relationship with Fannie Mae or the lender’s ﬁnancial condition,
      or outstanding contractual fees owed by a lender to Fannie Mae. Further, upon
      occurrence of a triggering event for a lender, Fannie Mae, in its sole and absolute
      discretion, may modify or eliminate the designated threshold amount and minimum
      transfer amount applicable to such lender without prior notice to the lender.
      Published May 6, 2026 1014 Default of Lender Under the Terms of Trading Account
      Under the terms of the trading account, certain events could result in the lender
      being in default. A lender is in default if Fannie Mae determines, at any time,
      that any of the representations that were made regarding the lender’s ability
      (or that of a designated authorized individual) to transact business is incorrect
      or untrue in any material respect, or if the lender: initiates a case or proceeding
      (or has a suit brought against it) under any bankruptcy, insolvency, reorganization,
      liquidation, dissolution, or similar law; seeks the appointment of a receiver,
      trustee, custodian, or similar oﬃcial for itself or any substantial part of
      its property; executes a general assignment for the beneﬁt of its creditors;
      admits in writing that it does not have the ability to pay its debts as they
      come due; is subject to an outstanding, uncontested order of relief or a protective
      decree issued under the Securities Investor Protection Act; or fails to perform
      as required. Instances of nonperformance that constitute a default include the
      failure to: perform any of the obligations set out in a conﬁrmation or settlement
      notice; perform any obligations with respect to completing a trade (or the admission
      that it is unable or unwilling to do so); perform obligations under any other
      agreement or contract it has with Fannie Mae; if notice is sent by Fannie Mae
      by 10:00 a.m. on a business day, satisfy the price diﬀerential on lender’s trades
      with the Capital Markets Pricing and Sales Desk by the close of business on
      that same business day; or if notice is sent by Fannie Mae after 10:00 a.m.
      on a business day, satisfy the price diﬀerential on lender’s trades with the
      Capital Markets Pricing and Sales Desk by 12:00 noon on the next business day.
      Consequences of a Default A default with respect to one transaction will constitute
      a default for all of the lender’s transactions with the Capital Markets Pricing
      and Sales Desk. See E-1-02, List of Contacts. The lender’s payments, deliveries,
      and transfers for one transaction may be applied (“netted”) against the lender’s
      other transactions. Fannie Mae also may treat a default under the lender’s trading
      account as a default under the lender’s MSSC. When that is the case, the provisions
      for “termination (of a selling or servicing arrangement or the contract) for
      cause” that are set out in A2-3.1-01, Lender Breach of Contract, will apply.
      Remedies for the Default of a Lender’s Trading Account Published May 6, 2026
      1015 The lender will be liable for any losses incurred by Fannie Mae due to
      the lender’s default with the Capital Markets Pricing and Sales Desk. See E-1-02,
      List of Contacts. The following table details the remedies that are available
      to Fannie Mae when it declares a lender to be in default under its trading account.
      If … Then … Fannie Mae declares a lender to be in default under its trading
      account, Fannie Mae may require that the settlement for all of the lender’s
      outstanding transactions be accelerated and take place immediately. In addition,
      Fannie Mae shall have all rights and remedies of a secured party under the Uniform
      Commercial Code and any other rights available under applicable law. The lender
      was committed to buy securities from the Capital Markets Pricing and Sales Desk,
      Fannie Mae may sell the securities at the current market value (or, as an alternative,
      give the lender credit for the current market value as if a sale had taken place).
      The lender will then be liable for any losses incurred by Fannie Mae that occur
      because the current market value is less than the purchase price the lender
      would have paid had the securities been transferred to it. The lender was committed
      to sell securities to the Capital Markets Pricing and Sales Desk, Fannie Mae
      may purchase securities of the same class and amount as those the lender was
      committed to sell at the current market value (or, as an alternative, deem itself
      to have purchased the comparable securities for the purpose of determining the
      lender’s liability). The lender will then be liable for any losses incurred
      by Fannie Mae that occur because the current market value is greater than the
      purchase price Fannie Mae would have paid had the lender transferred the securities
      to the Capital Markets Pricing and Sales Desk. In addition, the lender must
      pay: all reasonable legal and other expenses Fannie Mae incurs in connection
      with, or as the result of, the lender’s default under its trading account, and
      interest on the Fannie Mae losses and expenses for which the lender is liable
      from the date of default to the date the lender reimburses Fannie Mae. Note:
      The interest charged will be based upon the prime rate for commercial banks
      that is published in The Wall Street Journal. Published May 6, 2026 1016 If
      necessary, Fannie Mae may liquidate and apply against the obligations the lender
      owes as the result of its default, any and all of the lender’s securities, money,
      and other property that is held for (or by) Fannie Mae. Suitability and Risk
      of Loss The risk of loss when transacting with the Capital Market Pricing and
      Sales Desk can be substantial. A lender should carefully consider whether a
      transaction is suitable in light of its ﬁnancial condition, its investment objectives,
      and any legal or regulatory restrictions to which it may be subject. The market
      value for the securities to be purchased or sold by a lender can vary substantially
      over the term of a transaction. A lender should carefully consider if it has
      the operational resources in place to monitor the risks and contractual obligations
      of a transaction, including the risk that Fannie Mae may request that a lender
      post margin to satisfy a price diﬀerential on the same or the following business
      day. By agreeing to a conﬁrmation, the lender is deemed to have represented
      and warranted that it understands the risks associated with the transaction
      with the Capital Market Pricing and Sales Desk, and the lender believes that
      the transaction is suitable for the lender. Similarly, to the extent that the
      lender assigns or transfers any of its rights and obligations under any transaction,
      the lender shall be deemed to represent and warrant as of the date of such assignment
      that the lender has reasonable grounds to believe that any such assigned transaction
      is a suitable transaction for the assignee. Fannie Mae and the lender agree
      that, if any rights and obligations are so assigned by the lender, notwithstanding
      any consent to such assignment by Fannie Mae, Fannie Mae shall have no obligation
      to undertake an evaluation of the suitability of the assigned rights and obligations
      to the assignee. Before engaging in any transactions with the Capital Market
      Pricing and Sales Desk, a lender should consult its own business, legal, tax,
      risk, accounting, and other advisers and examine the provisions in this Chapter
      of the Guide to determine whether the risks to the lender are appropriate. Transactional
      Intent of the Lender and Fannie Mae The lender acknowledges, at all times, that
      Fannie Mae is not acting as a ﬁduciary or an advisor with respect to any transaction
      with the Capital Markets Pricing and Sales Desk. The lender and Fannie Mae also
      agree that transactions between the lender and the Capital Market Pricing and
      Sales Desk are intended to be: ”forward contracts,” “securities contracts, ”
      and “master netting agreements,” as such terms are deﬁned in the United States
      Bankruptcy Code, as amended, and of a type set forth in Section 5390(c)(8)(D)
      or Title 12, as amended; “qualiﬁed ﬁnancial contracts,” if the lender is an
      “insured depository institution” under the Federal Deposit Insurance Act, as
      amended; and a “netting contract” as deﬁned in and subject to Title IV of the
      Federal Deposit Insurance Corporation Improvement Act of 1991, as amended, and
      each payment entitlement and payment obligation under any transaction shall
      constitute a “covered contractual payment entitlement” or “covered contractual
      payment obligation, respectively, as such terms are deﬁned in such Act. The
      lender and Fannie Mae also agree that either party’s rights to cancel a transaction
      or exercise any other Published May 6, 2026 1017 remedies upon a default is
      a contractual right to liquidate such transaction as described in Section 555
      and 556 of the United States Bankruptcy Code, as amended, and a right to terminate,
      liquidate, or accelerate as described in Sections 5390(c)(8)(A) and (C) of Title
      12 of the United States Code, as amended. Recent Related Announcements The table
      below provides references to recently issued Announcements that are related
      to this topic. Announcements Issue Date Announcement SEL-2021-09 October 06,
      2021 Announcement SEL-2019-09 December 04, 2019'
  judgment: false
