Fannie Mae and Freddie Mac’s pricing frameworks may even see adjustments to higher serve “core mission borrowers,” in keeping with the Federal Housing Finance Agency (FHFA).
The regulator additionally, once more, argued for examination authority over entities doing enterprise with the government-sponsored enterprises.
In its annual report back to Congress, FHFA mentioned it instructed the enterprises to “begin updating their pricing frameworks” in 2021. It’s already made some pricing changes, after it raised the conforming mortgage limits to only shy of $1 million, by upping charges for some excessive steadiness and second dwelling loans.
Those pricing adjustments, it mentioned within the annual report, have been simply the primary “incremental step” in updating the pricing frameworks. In October 2021, FHFA Director Sandra Thompson indicated she deliberate a “holistic review” of Fannie Mae and Freddie Mac assure charges and mortgage pricing.
FHFA additionally offered updates to Congress on different facets of its oversight of the enterprises, together with their boards and administration. For each Fannie Mae and Freddie Mac, “Diversity and inclusion and fair lending oversight need attention,” it wrote.
It additionally highlighted dangers to Fannie Mae’s info know-how programs, writing that it “has exposures to information security risk, exhibiting opportunities to strengthen governance and controls in attendant risk management.”
The report additionally touted progress by the GSEs on housing targets set by FHFA. As of March, the GSEs have met all of their 2021 housing targets. Freddie Mac missed its low-income refinance objective final 12 months.
The regulator additionally took the chance to ask Congress to handle some objects past the scope of FHFA’s present authority.
FHFA requested Congress give it authority to look at providers offered to its regulated entities, a request it has included, in some type, in its annual report for a number of years. This 12 months’s request, nonetheless, was for much longer, elevating the query of whether or not the company now sees this as a better precedence.
An FHFA spokesperson didn’t instantly return a request for remark.
“FHFA recommends that Congress authorize FHFA to examine the records, operations, and facilities of each material service provider to a regulated entity with regard to the services provided to the regulated entity,” the FHFA wrote.
“Were Congress to grant FHFA such authority, giving FHFA tailored parity with other federal financial regulators, the Agency would be in a better position to achieve its statutory duty to ensure the safe and sound operations of the Enterprises and FHLBanks.”
The FHFA additionally mentioned having that authority would enable it to coordinate with different federal regulators for examinations of third-party service suppliers, “increasing efficiency and reducing burden.”
The FHFA had indicated earlier in 2022 it was seeking to ask Congress to increase its authority to oversee GSE counterparties, particularly nonbank servicers. Industry stakeholders largely panned that proposal.
The company mentioned in February, in its draft four-year strategic plan, that it didn’t have “power to examine important counterparties of its regulated entities, such as nonbank servicers,” which it mentioned might “interfere” with its “ability to ensure the safety and soundness of the regulated entities.” That language didn’t make it in to the ultimate model of the plan.
The prospect of FHFA supervision of nonbank mortgage servicers didn’t sit nicely with some trade stakeholders, together with the Community Home Lenders Association, which mentioned on the time oversight was “neither necessary nor warranted.”
The Mortgage Bankers Association additionally took concern with the enlargement of FHFA’s examination authority. The MBA on the time wrote FHFA’s regulation of the GSEs ought to “not extend to broad examination authority over all stakeholders and participants in the housing finance ecosystem, including Enterprise customers.”
Language about FHFA supervision of GSE counterparties additionally not too long ago surfaced in a invoice launched within the House of Representatives in March.
The Strengthening Cybersecurity for the Financial Sector Act would give the FHFA authority to control the supply of providers offered to the government-sponsored enterprises and Federal Home Loan Banks.
The title of the invoice suggests it’s geared towards giving the FHFA oversight of tech providers suppliers. But the invoice language as a substitute solely refers to service suppliers — which would come with counterparties resembling mortgage originators and servicers. The Housing Policy Council, which represents massive nonbank originators, in addition to servicers and banks, wrote to the House Financial Services Committee searching for clarification.
“We are troubled by suggestions that the bill would give FHFA authority to regulate and examine all nonbank mortgage servicers, a view that is inconsistent with both our reading of the text and of the purpose of the Bank Service Company Act on which this bill is based,” wrote Ed DeMarco, president of the Housing Policy Council, and former FHFA performing director.
The House Financial Services Committee superior the invoice, with out adjustments, in May.
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