WASHINGTON—The Federal Housing Finance Agency (FHFA) has issued its 2019 Report to Congress, which includes its response to the coronavirus pandemic as well as its plans to re-propose minimum financial eligibility requirements for Fannie Mae and Freddie Mac Sellers/Servicers.
As CUToday.info reported earlier, the FHFA had proposed the updated eligibility requirements at the end of January, which would also apply to servicing for Ginnie Mae mortgages and non-depository financial institutions. At the time, representatives of NAFCU met with the regulator following the initial proposal to discuss what the requirements will mean for non-depository institutions.
While the FHFA planned to finalize the updated requirements in the second quarter of this year, the notification of re-proposal said it determined "it is prudent to work with the Enterprises to reassess and re-propose these requirements, including incorporating lessons learned from the evolving COVID-19 national emergency."
According to the agency, the updated requirements intend to strengthen the government-sponsored enterprises' seller/servicer requirements, provide transparency and consistency of capital, and liquidity required for sellers/servicers with different business models, NAFCU said.
In its Report to Congress, the FHFA details how it is working to achieve three goals that are aligned with its statutory requirements:
- Cement FHFA as a world-class regulator to ensure that the regulated entities operate in a safe and sound manner
- Prepare the GSEs to responsibly exit conservatorships by calibrating their risk to match their capital
- Foster competitive, liquid, efficient, and resilient (CLEAR) national housing finance markets.
Other Issues
The report touches on issues such as the Federal Home Loan Banks, strategic plan for ending the GSEs' conservatorships – including the recently re-proposed GSE capital rule – London Inter-bank Offered Rate (LIBOR) transition, ending the practice of volume-based pricing, and more.
It also provides legislative recommendations, which the FHFA has provided before, including granting the agency authority to charter competitors to the GSEs, have oversight over third-party vendors, and set regulatory capital requirements for the GSEs, NAFCU noted.