FHFA Re-Proposes Updated Eligibility Requirements for Enterprise Single-Family Seller/Servicers
The Federal Housing Finance Agency on Thursday re-proposed minimum financial eligibility requirements for Fannie Mae and Freddie Mac seller/servicers.
FHFA said the update will strengthen, and provide transparency and consistency of, required capital and liquidity for seller/servicers with different business models.
“In an ongoing commitment to the safety and soundness of our housing finance system, the Enterprises must consider risk exposure from their contractual relationships with seller/servicers and assess, monitor and take appropriate actions to address the risks to which they are exposed in their business relationships with third parties,” said FHFA Acting Director Sandra L. Thompson.
Mortgage Bankers Association President and CEO Bob Broeksmit, CMB, said MBA appreciates that FHFA has re-proposed and is seeking additional comments on its minimum financial eligibility requirements for Enterprise seller/servicers. “We are especially pleased that, in several key areas, FHFA took industry comments into consideration when drafting the proposal,” he said. “This is a critically important framework to get right given the vital role independent mortgage banks play in serving the needs of low- and moderate-income borrowers and minority borrowers.”
Broeksmit noted the Biden administration’s focus on expanding homeownership to underserved borrowers and said it is important that the capital, liquidity and net worth standards are properly calibrated to mitigate risk but not excessive to the point where they will increase costs or reduce access for borrowers. “MBA looks forward to commenting on this re-proposal, as well as working with all policymakers and stakeholders to ensure sustainable access to affordable mortgage credit for borrowers,” he said.
Click here for a detailed summary of the proposal, including how it compares to existing requirements and prior FHFA proposals.
FHFA said one key improvement from the minimum financial requirements established in 2015 is that the re-proposed financial requirements differentiate between the servicing of Ginnie Mae mortgages and the servicing of Enterprise mortgages. Additionally, FHFA said it incorporated feedback from its 2020 proposal and lessons learned from market events in reaction to the global COVID-19 pandemic. “This proposal also reflects coordination with other federal agencies,” FHFA said in a statement.
FHFA said it will engage with servicing industry participants, regulators and other stakeholders to obtain their feedback. The agency it will receive input on these requirements for 60 days at ServicerEligibility@fhfa.gov and anticipates finalizing the requirements in the second quarter. Most of the requirements will become effective six months after they are finalized; some will be phased in over longer periods.
