On March 11, the Federal Housing Finance Agency (FHFA) issued revised guidance for evaluating Underserved Markets Plans submitted by Fannie Mae and Freddie Mac (the “GSEs”) for FHFA approval under the Duty to Serve regulation. The revised guidance strengthens the criteria for determining GSE compliance with the regulation, including through a revised ratings framework and higher expectations for impactful plans. Revised Guidance.
On February 18, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the “Enterprises”) have published a Joint Credit Score Solicitation, which describes the process for credit score model developers to submit applications to the Enterprises. The publication of the solicitation in the process of evaluating new credit score models will ensure that the Enterprises validate and approve credit score models in a timely and prudent manner. Release.
On May 8, 2017, Fannie Mae and Freddie Mac announced that they are considering certain changes to the structure of their CAS and STACR note programs in order to widen the investor base for the notes through which they transfer credit risk to the private sector. The proposed changes to CAS and STACR will also require certain changes to the tax structure of Fannie and Freddie MBS issuances. The intention is, despite the changes to the MBS tax structure, to preserve TBA eligibility of the MBS.
As proposed, a REMIC tax election will be made on mortgage loans purchased by Fannie and Freddie and put into their MBS. As a result, the MBS would, for tax purposes, represent ownership interests in REMIC regular interests rather than in mortgage loans. The CAS/STACR notes would also represent ownership of REMIC regular interests issued by new CAS/STACR trusts, which will make the CAS and STACR notes more attractive to REITs and foreign investors. The new structure would also eliminate Fannie and Freddie counterparty risk in the credit risk transfer programs.
Fact Sheets and FAQs are linked to the Press Releases. Press Release (Fannie). Press Release (Freddie).
On December 15, 2015, the Federal Housing Finance Agency issued a proposed rule that would require Fannie Mae and Freddie Mac to provide specific services relating to manufactured housing, affordable housing preservation and rural markets. The proposed rule would also require Fannie Mae and Freddie Mac to address financing concerns in very low- to moderate-income families in those areas. Press release.
On March 16, the FHFA issued a Progress Report on the initiatives outlined in the 2014 Strategic Plan for the Conservatorships of Fannie Mae and Freddie Mac and the 2014 Conservatorship Scorecard. The Progress Report describes activities Fannie Mae and Freddie Mac undertook in 2014 to further FHFA’s conservatorship goals: Maintain, Reduce, and Build. Release. Report.
On March 2, FHFA announced changes to requirements for sales of non-performing loans (NPLs) by Freddie and Fannie to reduce the number of severely delinquent loans held in their inventories and to transfer risk to the private sector. The requirements are expected to encourage broad participation by potential investors and provide for future publication of aggregate data about borrower outcomes. Release. Fact Sheet.
On February 3, Judge Jed S. Rakoff of the United States District Court of the Southern District of New York denied Bank of America Corporation’s and Rebecca Mairone’s motion for judgment as a matter of law, or, in the alternative a new trial. The jury found Bank of America and Mairone liable under the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) for the sale of mortgage loans to Fannie Mae and Freddie Mac before the financial crisis. Judge Rakoff found that the jury’s October 23, 2013 verdict was supported by sufficient evidence. Order.
On January 30, the Federal Housing Finance Agency (FHFA) today proposed new minimum financial eligibility requirements for Fannie Mae and Freddie Mac Seller/Servicers. The proposed minimum financial requirements include net worth, capital ratio and liquidity criteria for the Enterprises’ Seller/Servicers. FHFA is releasing the proposed criteria to provide greater transparency, clarity and consistency to industry participants and other stakeholders, and anticipates finalizing these requirements in the second quarter of 2015. Release.
On January 27, 2015 the FHFA Director, Melvin L. Watt, testified in front of the U.S. House of Representatives Committee on Financial Services. Director Watt’s testimony provided, amongst other items, an update on the financial condition of Fannie Mae and Freddie Mac and the financial condition of the Federal Home Loan Banks. Release.
On January 14, FHFA released the 2015 Scorecard outlining specific priorities for Fannie Mae, Freddie Mac and their joint venture, Common Securitization Solutions, LLC. The Scorecard assesses Fannie and Freddie’s performance under FHFA’s Strategic Plan for Fannie and Freddie and furthers the goals outlined thereunder, including building a new single-family securitization infrastructure for use by the Enterprises. Release. Scorecard. Strategic Plan.
