The Federal Housing Finance Agency released a report on Wednesday detailing the progress made by Fannie Mae and Freddie Mac on goals established in the 2016 Scorecard. The Scorecard, which sets expectations for the GSEs, is published annually by the FHFA in furtherance of its objectives to “Maintain,” “Reduce,” and “Build” in its role as conservator of the Enterprises.
According to a release from FHFA, the report notes GSE developments regarding access to credit, borrower and community assistance, credit risk transfer programs, reducing taxpayer risk, accomplishments in building a new securitization infrastructure, and diversity and inclusion efforts, among other things.
“In collaboration with Fannie Mae and Freddie Mac, FHFA has made significant progress in meeting our conservatorship objectives,” FHFA Director Melvin L. Watt said. “This report underscores our commitment to transparency as we continue to foster liquidity and efficiency in the housing finance markets, reduce risk to taxpayers and build a new mortgage securitization infrastructure, all in a safe and sound manner.
The report breaks down GSE developments according to which objective of FHFA’s conservatorship they fall under. In the “Maintain” category, which includes FHFA’s goals like “maintain[ing] credit availability and foreclosure prevention activities,” the report notes several strategies the GSEs have used to increase credit access to borrowers.
These include removing prohibitions on previously restructured loans, improving the automated underwriting systems, encouraging the use of alternative credit scoring models for those who don’t have traditional credit histories, and selling non-performing loans. According to the report, the Enterprises have sold 72,502 non-performing loans since 2014.
In efforts to mitigate foreclosures, FHFA’s report noted the GSEs’ enhancements to the Representations and Warranties Framework, the development of rescission relief principles for mortgage insurers, implementation of final HARP strategies, and improved housing counseling programs.
Under the “Reduce” objective, which includes the FHFA goal of “reducing taxpayer risk by increasing the role of private capital in the secondary mortgage market,” the report notes the GSEs’ credit risk transfer activity for 2016 and over the lifetime of CRT efforts.
“Since the beginning of the program in 2013, the Enterprises have transferred a portion of credit risk on loans with $1.44 trillion in UPB and total RIF of $49 billion,” the report stated. “In 2016, the Enterprises transferred credit risk on single-family mortgage loans with a total UPB of approximately $548 billion and total RIF of about $18.1 billion.”
As part of FHFA’s “Build” efforts, which include the goal of building “a new infrastructure for the securitization functions of the Enterprise,” the report notes industry outreach efforts, the Uniform Mortgage Data Program, and updates to the Common Securitization Platform and the Single Security Initiative. Part one of the release was launched in November 2016; part two is scheduled for Q2 2019.
FHFA is soliciting input on the Progress Report. All comments can be submitted at FHFA.gov.