MBA Annual20: FHFA Proposes Rule for New Enterprise Products, Activities

(Federal Housing Finance Agency Director Mark Calabria addresses MBA Annual Convention & Expo Oct. 19.)

Federal Housing Finance Agency Mark Calabria yesterday told MBA members that the agency wants comments on a proposed rule that would require Fannie Mae and Freddie Mac to obtain approval for new products and notice before engaging in new activity.

Speaking at the Mortgage Bankers Association’s Annual Convention and Expo 2020, Calabria said FHFA wants to determine whether new Fannie Mae and Freddie Mac activity aligns with the enterprises’ mission.

The proposed rule, Prior Approval for Enterprise Products Proposed Rule, would replace the interim final rule on new product approval issued by FHFA in 2009. 

“Working closely with FHFA’s stakeholders has been a top priority of mine,” Calabria said at the MBA LIVE event. “The past seven months illustrate how important it is for FHFA to hear from market participants and consumers across the country. We welcome and need that feedback. Today, I am announcing to MBA Annual that FHFA is releasing a new rule that will ensure stakeholders and the public always have a formal opportunity to provide feedback when the Enterprises consider new products or lines of business.”

This proposed rule should help FHFA enhance the safety and soundness of the secondary mortgage market, said Calabria.

MBA sent a letter to FHFA on October 5 commenting on the agency’s 2021-2024 strategic plan. That letter recommended FHFA enhance the approval process for new GSE products, activities and technologies.

Comments are due within 60 days of the proposed rule’s publication. MBA is forming a working group of interested persons to assist in gathering and submitting comments.

Calabria also updated MBA members about FHFA’s COVID response. “Since early March, we have all been doing our part to respond to the COVID-19 national emergency,” he said. “MBA members have been on the front lines of the response to COVID’s effects on borrowers. You have helped millions get into forbearance plans. Now, you are helping many who are ready to get back to paying their mortgage. You have helped homeowners benefit from historically low rates through refinancing. And throughout it all, you have continued underwriting the good loans that make homeownership both affordable and sustainable. I appreciate all your efforts that have helped keep the market functioning through this time of stress.”

FHFA also moved “swiftly” to respond to the developing challenges, Calabria noted. “Working with our regulated entities, we have helped borrowers and renters stay safe in their homes. And we have taken steps to help the mortgage market continue functioning both during and after this crisis,” he said.

When local government offices were shutting down across the country, FHFA authorized loan-closing, employment-verification and appraisal flexibilities, Calabria said. “These flexibilities have kept the origination process open and ensured the physical safety of market participants,” he said. “Today that we are extending these flexibilities until at least November 30.”