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DS News Webcast: Monday 2/2/2015

The Federal Housing Finance Agency announced proposed new financial eligibility requirements in order to align the minimum financial requirements for mortgage sellers and servicers to do business with Fannie Mae and Freddie Mac. The proposed requirements include minimums for net worth, capital ratio, and liquidity criteria that must be met by servicers and sellers to do business with the GSEs. The purpose of the requirements is to ensure safe and sound operations of the GSEs and at the same time further the FHFA's goal of promoting efficient, competitive, liquid, and resilient national finance markets for housing.

The proposed minimum requirement for net worth for all sellers and servicers is a base of $2.5 million dollars, plus 25 basis points of unpaid principal balance for all loans serviced. For minimum capital ratio, the proposed requirement for non-depository sellers and services is assets totaling a minimum of 6 percent. For minimum liquidity, the proposed requirement for non-depository sellers and servicers is 3.5 basis points of the agency's total servicing, and incremental 200 basis points of total nonperforming agency servicing that exceeds 6 percent of the agency's total unpaid balance.

Freddie Mac's total mortgage portfolio ended 2014 on a strong note with its highest annualized growth rate for a single month in five years, according to the enterprise's December 2014 Monthly Volume Summary. The mortgage portfolio expanded by 4.5 percent – an increase of $7.14 billion – up to an estimated $1.91 trillion in December, the highest annualized growth rate for any one month seen in Freddie Mac's portfolio since December 2009. Also in the report, the single-family serious delinquency rate for Freddie Mac loans fell to 1.88 percent, its lowest level since January 2009.

About Author: Jordan Funderburk


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