The Federal Housing Finance Agency announced at this year’s Mortgage Bankers Association Annual event that it is proposing a new rule for activities and products from the government-sponsored enterprises.
The proposed rule replaces an interim rule from 2009 and would require Fannie Mae and Freddie Mac to provide advance notice to the FHFA on any new activities and obtain prior approval before launching new products. The trigger date for an activity to be considered new is the effective date of the final rule.
Additionally, the proposed rule establishes revised criteria for determining whether a new activity requires notice to FHFA and for determining if that activity is a new product that merits public notice and comment. The proposed rule’s requirements would also outline the process for FHFA review of a new activity and the timelines for approving a new product, including issuing a public notice and requesting public comment about a potential new product.
“I am announcing to the MBA Annual that FHFA is releasing a new rule that will ensure stakeholders and the public always have a formal opportunity to provide feedback when the Enterprises consider new products or lines of business,” FHFA Director Mark Calabria said at the event. ““This proposed rule is an important step as the Agency works to end the Enterprises’ conservatorships.”
The FHFA announced that interested parties can submit comments on the notice of proposed rulemaking within 60 days of its publication in the Federal Register.
“We are obligated to ensure Fannie and Freddie stay focused on their core mission and do not stray into business the market already serves well,” Calabria said. “Feedback from those on the ground helps us hold this line.”
During his panel, Calabria also announced that the FHFA will further extend its COVID-19-related flexibilities through Nov. 30, 2020. The flexibilities were previously set to expire at the end of October.
“I recognize that servicers have entered another busy period as the expiration of many initial forbearance plans now requires them to contact and review options with each borrower,” Calabria said at the event. “Thank you again for doing the hard work of helping borrowers through this time of financial stress.”
Extended flexibilities include:
- Alternative appraisals on purchase and rate term refinance loans
- Alternative methods for documenting income and verifying employment before loan closing
- Expanding the use of power of attorney to assist with loan closings
In the FHFA’s strategic plan for fiscal years 2021 to 2024, Calabria laid out his future plans for Fannie Mae and Freddie Mac as he continues to set milestones leading to “ending the conservatorships of the enterprises responsibly,” he stated.
Calabria has been moving full steam ahead to release the companies from conservatorship. He told Congress during testimony in September that it’s his duty, under the statute that authorized the federal seizure of the companies during the financial crisis in 2008.