federal housing finance agency (FHFA) has delayed implementing a rule that would have required fannie mae And Freddie Mac To obtain approval from the regulator before introducing new products or services.
Thank you for reading this post, don't forget to subscribe!The FHFA said on Friday morning that the rule issued on December 20 was previously to take effect on Monday, February 27, but has been postponed until April 28. The agency said delaying implementation would give Fannie Mae and Freddie Mac the time they needed to comply with the rule’s requirements.
Although it is not a matter of much relief. In its official notice in the Federal Register, the FHFA stated that “In the interim, the FHFA will require enterprises to delay starting any activity that meets the new activity criteria until a final rule by the FHFA.” Those activities cannot be reviewed.”
When the rule was first announced, FHFA director Sandra Thompson said the order clarified how the FHFA would assess new activities and products proposed by Fannie Mae and Freddie Mac.
“Enterprise activities can have a significant impact on the mortgage market, consumers and industry stakeholders, and today’s rule further refines the FHFA’s process to ensure that activities are conducted by enterprises while maintaining high standards of safety and soundness.” continue to fulfill the mission of,” he said in a statement.
The FHFA defined the new activity as:
1) an activity (ie a business line, business practice, offering or service that serves the enterprise market either on a standalone basis or as part of a business line, business practice, offering or service);
2) an increase, change, or modification of an activity described by one or more of the following criteria: requires a new resource, data type, process, infrastructure, policy, or modification to an existing policy; expands the scope or increases the level of credit risk, market risk, or operational risk for the enterprise; or a new category of borrower, investor, counterparty or collateral is included;
3) modification of a pilot or the duration or quantity of a pilot;
4) an activity that results from a pilot
The GSEs recently reported their fourth quarter performance, both of which were expectedly faltering from the prior year. Fannie Mae reported $1.4 billion in net income in Q4, down from $2.4 billion in Q3 and $5.2 billion a year ago. In a freezing cold housing market, Fannie Mae also raised its provisioning for losses for the third consecutive quarter. Overall, Fannie Mae projects net income of $12.9 billion in 2022, down from $22.1 billion in 2021.
Freddie Mac on Wednesday reported fourth-quarter net income of $1.76 billion. The figure was a sequential gain on the $1.3 billion in net income reported in the third quarter of 2022, but a 36% decline from a year earlier. Both GSEs reported being less capitalized – Freddie Mac at $140.2 billion and Fannie Mae at $258 billion.
