Fannie Mae and Freddie Mac have the Treasury Department’s support when it comes to appraisal waivers, according to a newly published report this week from the Treasury on nonbank financials, fintech and innovation. A portion of the report focused on updating activity-specific regulations under the realm of lending and servicing. Treasury explained that it supports the GSEs’ efforts to implement standardized appraisal reporting, their adoption of proprietary electronic portals to submit appraisal forms and the GSEs’ limited adoption of appraisal waivers. The report acknowledged concerns from the appraisal industry but touted the benefits of using the waivers. “While Treasury acknowledges that
The Federal Housing Finance Agency Office of Inspector General said the GSE boards’ undelegated authority has changed significantly over the past five years. Some items like seller/servicer master agreements no longer need FHFA approval. In a white paper published last week, the IG examined the Federal Housing Finance Agency’s letters of instruction (LOI) to the boards of Fannie Mae and Freddie Mac. The letters were initiated at the start of the conservatorship in 2008, revised in 2012 and updated again in December 2017. They are sent to the GSE boards to define and...
The Federal Housing Finance Agency decided to call off plans to announce a decision regarding alternative credit scores. Some credit-score providers are disappointed. The Fannie Mae and Freddie Mac regulator spent years discussing the topic and months reviewing comments on credit-scoring options after issuing a request for input last year. But it abruptly called off going any further and said it will now focus on implementing credit-score provisions in the recently enacted Dodd-Frank reform legislation. Under the Economic Growth, Regulatory Relief and Consumer Protection Act, which passed in May, the FHFA is required to issue new rules that set standards and approval criteria for how the GSEs validate their credit-score models.
A senior executive at Fannie Mae is involved in a conflict-of-interest administrative review pertaining to alternative credit scores, according to a Federal Housing Finance Agency Office of Inspector General management alert. The 15-page alert, published on July 26, is heavily redacted. It noted that an executive did not disclose “critical information” about potential conflicts of interest. The IG said the person failed to make a timely and complete disclosure about a potential conflict of interest and asked the FHFA to take appropriate disciplinary action. “FHFA’s decision whether to accept an alternative credit scoring model for the enterprises is a high-stakes decision, with long-term impact,” said the OIG.
The Federal Home Loan Bank System saw a 13 percent yearly increase in earnings during the second quarter of 2018. The FHLBank’s Office of Finance reported that net income was $971 million for the quarter, up from $858 million in the first quarter. And for the entire first half of the year net income totaled $1.829 billion, an increase of 10 percent from a year earlier. The OF attributes the upswing to an increase in net interest income that was partially offset by lower non-interest income. [Includes one data chart.]
As the financial markets begin transitioning from the London Interbank Offered Rate, which is set to go away in 2021, Fannie Mae became a pioneer in a replacement index by issuing Secured Overnight Financing Rate (SOFR) securities. The government-sponsored enterprise announced that the three-tranche $6 billion SOFR debt transaction was created to accelerate the development of the SOFR market. And Fannie encourages other issuers in debt markets to follow. The inaugural transaction garnered strong investor demand for the floating rate notes from a diverse investor base, according to Fannie.
Multifamily purchase volume continued to surge for the GSEs in the second quarter. But as the mortgage giants maintain their large footprint in the multifamily market, some industry observers allege mission creep. During the second quarter, Fannie Mae provided $14.5 billion in multifamily financing, up from $11.3 billion in the first quarter of 2018. Freddie Mac also increased its volume in the second quarter and provided $15.8 billion in multifamily credit, up from $13.0 billion in the first quarter. Second-quarter numbers are a good indicator that even at the midway point in 2018, the GSEs are on track to meet or surpass last year’s financing volume.
The GSEs have recently updated their policies as they look to simplify borrower-initiated requests to cancel private mortgage insurance coverage. Fannie is the latest to announce plans to update the various methods it uses for verifying current property values and said it will require servicers to implement the new policy by March 1, 2019. Borrower-initiated requests to terminate mortgage insurance based on the home’s original value no longer need to depend on servicers to warrant the property value, under Fannie’s new policy. The GSE said lenders can use the GSE’s Automated Property Service tool to verify the current...
Capital Proposed Rule Comment Period Extended to November. The Federal Housing Finance Agency announced this week that it is extending the public comment period for the agency's proposed rule on Enterprise Capital Requirements by an additional 60 days. The previous deadline for comments was Sept. 17, 2018. The new deadline will be Nov. 16, 2018. FHFA extended the public comment period “due to the high level of interest in the proposed rule and requests from multiple stakeholders for more time to evaluate it.” GSE shareholders group Investors Unite, said, “However complex capital standards are, professionals who dwell in this policy area every day should be able to offer their views within a three-month window.”
RSS