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FHFA Charts Year Ahead for Fannie & Freddie

FHFAWith an eye on a hot housing market in 2018, the Federal Housing Finance Agency (FHFA) released its 2018 goals for its Government Sponsored Enterprises (GSEs)—Fannie Mae and Freddie Mac—and Common Securitization Solutions (CSS) on Thursday.

FHFA said that in 2018 it would score the GSEs and CSS on the following goals: Maintaining credit availability and foreclosure prevention activities for new and refinanced mortgages in a safe and sound manner to foster liquid, efficient, competitive and resilient national housing finance markets; reducing taxpayer risk through increasing the role of private capital in the mortgage market; and building a new single-family infrastructure for use by the GSEs and adaptable for use by other participants in the secondary market in the future.

For all Scorecard items, the GSEs and CSS will be assessed on the following criteria:

The extent to which each GSE conducts initiatives in a safe and sound manner consistent with FHFA's expectations for all activities; The extent to which the outcomes of each Enterprise's activities support a competitive and resilient secondary mortgage market to support homeowners and renters; The extent to which each GSE conducts initiatives with consideration for diversity and inclusion consistent with FHFA's expectations for all activities;

cooperation and collaboration with FHFA, each other, the industry and other stakeholders; and

The quality, thoroughness, creativity, effectiveness and timeliness of their work products.

For 2018, FHFA advised both, Fannie Mae and Freddie Mac to efficiently and effectively operate their single-family and multifamily business activities in a manner that supports safety and soundness, market liquidity, and access to credit.

Going into 2018, The FHFA also expects the GSEs to continue single-family and multifamily credit risk transfers as core business practices and will adjust targets as necessary to reflect market conditions and economic considerations. The FHFA has advised the GSEs to continue to refine and improve their credit risk transfer programs. FHFA plans to publish the actual amount of credit risk transferred by each GSE in CRT progress reports.

The FHFA also advised the GSEs and CSS to implement the Single Security initiative on the Common Securitization Platform (CSP) for both GSEs by the second quarter of 2019.

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