The Federal Housing Finance Agency announced on Monday a 60-day extension for the comment period for proposed rule to revise membership requirements for Federal Home Loan Banks back in September. The comment period which was set to end on November 12, 2014, which is 60 days from the date it was published in the Federal Register, will now end on January 12, 2015. FHFA gave as its reasons for extending the comment period the importance of the issues being addressed, the high interest level in the proposal, and requests from stakeholders for more time to evaluate the proposal.
One of the proposed changes would eliminate captive insurers for consideration for FHLB membership by changing the definition of "insurance company" to include only those companies that have insurance underwriting for nonaffiliated parties as their primary business. Another proposed revision requires members to hold one percent of their assets in home mortgage loans on an ongoing basis, whereas under current guidelines members are required to demonstrate this only at the time of their application and not at any time afterward. Similarly, the proposed rule revisions would require members to adhere to the 10 percent residential mortgage loan requirement on an ongoing basis instead of just at the time of application.
Freddie Mac followed the lead of its sister government-sponsored enterprise, Fannie Mae, and reported a serious delinquency rate of less than 2 percent for August in its recently-released August 2014 Monthly Summary. The serious delinquency rate was reported to be at 1.98 percent for Freddie Mac in August, which is a drop from the 2.02 percent that was reported in July. Just like analysts predicted for Fannie Mae, which recently announced a serious delinquency rate of 1.99 percent for August, Freddie Mac's rate could drop below the "normal" level of 1.0 percent sometime in 2016 if the decline continues at its current rate.