Meridian Capital Group Re-enters Fannie Mae Loan Market with New Compliance Measures

After a significant hiatus, Meridian Capital Group has received approval to resume its activities within the Fannie Mae loan market. This announcement was made public on Friday, indicating a pivotal shift in the firm’s operations after a year-long restriction imposed by Fannie Mae.

Resumption of Loan Negotiations

Effective immediately, lenders affiliated with Fannie Mae are now permitted to engage in negotiations for loans brokered by Meridian. This is a notable development following the suspension that had put a halt to such transactions due to concerns surrounding a specific deal negotiated by the firm.

Background on Previous Restrictions

In November 2023, Meridian faced similar limitations with Freddie Mac, which were lifted later that year following improved assessments of the firm’s processes. The return to full operational capacity with Fannie Mae marks a significant recovery for Meridian and showcases its efforts to enhance compliance and governance.

Strengthening Compliance and Risk Management

Brian Brooks, the current chairman and CEO of Meridian, expressed gratitude for Fannie Mae’s acknowledgment of the firm’s strides towards better risk management. “Meridian has made investments in people, processes and technology to implement a risk-management and internal control environment that is best-in-class among commercial mortgage brokerages,” said Brooks. “We appreciate Fannie Mae’s recognition of our commitment to continuous improvement in these areas and look forward to offering our clients a full suite of financing options, including agency execution.”

Leadership Changes and Strategic Appointments

In March 2024, Brooks succeeded Ralph Herzka as the CEO of Meridian, bringing a wealth of experience from his previous roles, including his tenure as the acting controller of the currency. To further solidify its compliance framework, Meridian appointed Melissa Martinez as its first chief risk officer in June 2024, following her previous role at CoreLogic.

New Measures for Enhanced Compliance

This year, Meridian has taken significant steps to improve its underwriting processes. Among these developments are:

• A comprehensive screening process for all transactions handled by brokers.
• A management credit approval committee that reviews large loans and all Freddie Mac and Fannie Mae transactions prior to financing.
• A quarterly loan review process to monitor compliance after transactions are completed, enabling swift responses to any identified issues.

Martinez emphasized the importance of this oversight, stating, “The process oversight we have put in place will give lenders confidence that Meridian transactions have been carefully reviewed in a process that is as robust as you would expect from a bank.”

Market Context and Future Outlook

Fannie Mae and Freddie Mac are currently navigating a transitional period under the leadership of Bill Pulte, appointed chair of the Federal Housing Finance Agency by President Donald Trump. This leadership change is prompting discussions around the potential privatization of the government-sponsored enterprises (GSEs).

Officials from Fannie Mae did not provide immediate comments regarding these recent developments.