Dodd-Frank News Center

CFPB and FHFA release dataset on borrowers' mortgage experiences

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau and Federal Housing Finance Agency have released for public use a new loan-level dataset collected through the National Survey of Mortgage Originations that provides insights into borrowers' experiences in getting a residential mortgage. According to the CFPB's press release, the NSMO is a component of the National Mortgage Database, launched by the Bureau and FHFA in 2012, which is the first comprehensive repository of detailed mortgage loan information designed to support policymaking and research efforts and to help regulators better understand emerging mortgage and housing market trends. 

According to FHFA Deputy Director Sandra Thompson, "The goal of the survey is to obtain information to help improve lending practices and the mortgage process for future borrowers." CFPB Acting Director Mick Mulvaney said the data collected through the survey "will allow greater transparency, accountability, and effectiveness around borrowers' mortgage experiences."

FHFA issues guidance on liquidity risk management for Enterprises

This story appeared in Bank Digest.  

The Federal Housing Finance Agency has issued an advisory bulletin that communicates to Fannie Mae and Freddie Mac (the Enterprises) the agency's guidance for the management of liquidity risk. According to the bulletin, the FHFA expects the Enterprises to use liquidity metrics that are commensurate with their funds management strategies and provide a comprehensive view of their liquidity risk to ensure that sufficient funds are available at a reasonable cost to meet potential demands. The bulletin supersedes AB 2014-01.

OIG finds FHFA followed procedures for documenting Enterprise Scorecard target changes

This story appeared in Bank Digest.                                     

The Federal Housing Finance Agency’s Office of Inspector General has issued a compliance review to test the FHFA's implementation of recently adopted Scorecard procedures for Fannie Mae and Freddie Mac (the Enterprises) during 2017. According to the report, the FHFA annually issues to the Enterprises a Scorecard with objectives for them to achieve in furtherance of the agency's strategic goals for their conservatorships. The agency groups the objectives into projects, which are comprised of discrete tasks called "targets" with scheduled completion dates. 

The OIG cited a 2016 audit report in which it found that the FHFA had revised Scorecard targets or extended the time within which they were to be completed but failed to document those changes. The OIG recommended that the agency adopt standards by which revisions to Scorecard targets would be documented, and the FHFA adopted such Scorecard procedures in June 2016. 

In the current report, the OIG found that of the 30 projects in the 2017 Scorecard, the FHFA had revised targets or their completion dates associated with 14 of the projects. The OIG conducted independent testing of the agency's process for tracking and documenting target modifications and found that the agency had adhered to its procedures.

Corker supports Administration plan to reform Fannie Mae and Freddie Mac

This story appeared in Bank Digest.   

Senator Bob Corker (R-Tenn) has issued a statement on the Trump Administration's proposal to reform government-sponsored enterprises Fannie Mae and Freddie Mac that was included in a plan to reform and reorganize the federal government. 

With regard to the government-sponsored enterprises, the plan proposed "ending the conservatorship of Fannie Mae and Freddie Mac, reducing their role in the housing market, and providing an explicit, limited Federal backstop that is on-budget and apart from the Federal support for low- and moderate-income homebuyers." The plan also proposed "transitioning Fannie Mae and Freddie Mac to fully private entities." 

Corker said, "It is long past time to end the failed model of private gains and public losses, and I agree with the administration that creating competition is a critical step as we work to shrink Fannie and Freddie and put an end to 'too big to fail' mortgage companies." He added that the framework put forth by Office of Management and Budget Director Mick Mulvaney "is the right one and closely resembles the approach we laid out in recent legislative drafts developed on a bipartisan basis in the Senate."

FHFA releases report on Enterprise sales of non-performing loans

This story appeared in Bank Digest. 

The Federal Housing Finance Agency has released its "Enterprise Non-Performing Loan Sales Report," which provides information about the sales of non-performing loans by Fannie Mae and Freddie Mac (the Enterprises) and borrower outcomes after the sales. The report includes information about NPLs sold through Dec. 31, 2017, and reflects borrower outcomes as of Dec. 31, 2017, on NPLs sold through June 30, 2017. 

According to the FHFA, the sale of NPLs reduces the number of delinquent loans held in the Enterprises' inventories and transfers credit risk to the private sector. The FHFA and the Enterprises impose requirements on NPL buyers designed to achieve more favorable outcomes for borrowers than foreclosure.

FHFA issues orders and instructions regarding Dodd-Frank Act stress tests

This story appeared in Bank Digest.   

The Federal Housing Finance Agency has issued orders to Fannie Mae, Freddie Mac, and the Federal Home Loan Banks requiring them to report annual stress test results as of Dec. 31, 2017, in accordance with the Dodd-Frank Act. Each order is applicable March 1, 2018. The agency has also issued Summary Instructions and Guidance to Fannie Mae, Freddie Mac, and the FHLBanks regarding these stress tests. 

The orders, through the accompanying Summary Instructions and Guidance, prescribe for these entities the scenarios to be used for stress testing. The Summary Instructions and Guidance also provides advice concerning the content and format of required reports. 

The Dodd-Frank Act requires certain financial companies with total consolidated assets of more than $10 billion, and which are regulated by a primary federal financial regulatory agency, to conduct annual stress tests to determine whether the companies have sufficient capital to absorb losses as a result of adverse economic conditions.

Agencies propose amending swap margin requirements

This story appeared in Bank Digest.   

Five federal agencies--the Federal Reserve Board, Farm Credit Administration, Federal Deposit Insurance Corporation, Federal Housing Finance Agency, and Office of the Comptroller of the Currency--are proposing to amend swap margin requirements to conform with recent rule changes that impose new restrictions on certain qualified financial contracts of systemically important banking organizations. The Swap Margin Rule was issued in November 2015 by the agencies and established minimum margin requirements for swaps and security-based swaps that are not cleared through a clearinghouse. 

The agencies' joint release said that under the proposed amendments, legacy swaps entered into before the applicable compliance date would not become subject to the margin requirements if they are amended solely to comply with the requirements of the QFC Rules. 

In addition, the proposed amendments would also harmonize the definition of "Eligible Master Netting Agreement" in the Swap Margin Rule with recent changes to the definition of "Qualifying Master Netting Agreement" in the respective capital and liquidity regulations of the Federal Reserve Board, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency. Comments on the proposed rule should be received within 60 days of its publication in the Federal Register.

OIG finds that conflicts of interest among Fannie Mae officers requires closer attention

This story appeared in Bank Digest. 

The Federal Housing Finance Agency Inspector General evaluated the FHFA's oversight, as conservator, of the Fannie Mae Board of Directors' execution of its responsibilities regarding potential conflicts of interest involving Senior Executive Officers in its new report, "Corporate Governance: Review and Resolution of Conflicts of Interest Involving Fannie Mae's Senior Executive Officers Highlight the Need for Closer Attention to Governance Issues by FHFA." 

The evaluation found failures, both by Fannie Mae's Nominating and Corporate Governance (NCG) and by FHFA, which created a weakness in Fannie Mae's risk management structure. Without enhancements to the NGC's oversight, there is a significant risk that the NGC will continue to fall short in exercising its governance responsibilities. The OIG made eight recommendations to FHFA to address these shortcomings. FHFA agreed with its recommendations.

 

FHFA releases 2018-2022 strategic plan

This story appeared in Bank Digest.                                     

The Federal Housing Finance Agency has released its "FHFA Strategic Plan: Fiscal Years 2018-2022," which reflects the agency's priorities as regulator of the Federal Home Loan Banks and as regulator and conservator of Fannie Mae and Freddie Mac (the Enterprises). According to the FHFA, the strategic plan sets forth three goals for the agency: (1) ensure safe and sound regulated entities; (2) ensure liquidity, stability, and access in housing finance; and (3) manage the Enterprises' ongoing conservatorships.

Foreclosure Prevention Report issued

This story appeared in Bank Digest. 

The Federal Housing Finance Agency has issued its Foreclosure Prevention Report for the third quarter of 2017. According to the report, Fannie Mae and Freddie Mac (the Enterprises) completed 41,465 foreclosure prevention actions in the third quarter, bringing the total to 3,972,689 since the Enterprises were placed into conservatorship in September 2008.                                 

Regarding the Enterprises' mortgage performance, the report said the serious delinquency rate remained flat at 0.95 percent at the end of the third quarter.