Federal housing regulators have been busy requesting and
reviewing feedback from industry stakeholders on a wide array of proposed
changes impacting mortgage originators and other institutions. Below are two
particularly impactful requests for information for the secondary market and
third-party originators, as well as news from two prudential financial
regulators:
FHFA seeks input on DTS proposal
The Federal Housing Finance Agency (FHFA) issued
a request for input (RFI) regarding proposed 2025-2027 Underserved
Markets Plans, submitted by Fannie Mae and Freddie Mac (the Enterprises) under
the Duty to Serve (DTS) program. The proposed plans cover the period from Jan.
1, 2025, to Dec. 31, 2027.
“Providing sustainable liquidity for affordable housing
preservation, rural housing, and manufactured housing in a safe and sound
manner is a key component of the Enterprises’ statutory responsibility to serve
underserved markets,” FHFA Director Sandra Thompson said in a press release. “I
look forward to hearing the public’s input and feedback on the plans the enterprises
have proposed.”
Under the Housing and Economic Recovery Act of 2008, Fannie
Mae and Freddie Mac are required to serve three specified underserved markets —
manufactured housing, affordable housing preservation, and rural housing — by
increasing the liquidity of mortgage financing for very low-, low-, and
moderate-income families in those markets. FHFA said interested parties are
invited to provide written input, feedback, and information on all aspects of
the proposed plans by Aug. 12. Responses may be submitted through the DTS page on FHFA’s
website. FHFA also will hold three listening sessions to review the proposed plans
on July 15, 16, and 17. Interested participants can register here.
FHA seeks feedback on updates to Origination Defect
Taxonomy
Following the publication of its Single
Family Housing Drafting Table, the Federal Housing Administration (FHA)
posted a notice seeking feedback on the draft mortgagee letter (ML), Fraud
or Misrepresentation Involving Sponsored Third-Party Originators. The draft
ML proposes updates to the FHA’s defect taxonomy to include fraud or material
misrepresentation involving a third-party originator (TPO) as a Tier 1 severity
defect. The proposed changes are indented to better align the defect taxonomy
with these existing requirements and mitigate risk to the Mutual Mortgage
Insurance Fund (MMI Fund). Interested stakeholders are encouraged to thoroughly
review the draft ML and provide feedback through June 24. Instructions for
viewing the draft ML and providing feedback are available here.
OCC launches ‘Project REACh 2.0’
The Office of the Comptroller of the Currency (OCC)
announced the launch of REACh 2.0 at its Project REACh (Roundtable for Economic
Access and Change) Financial Inclusion Summit. The initiative was created to gather
leaders from the banking industry, national civil rights organizations,
business, and technology to identify and reduce barriers that prevent full,
equal, and fair participation in the nation’s economy, according to an OCC
press release.
“Through Project REACh, more than 100,000 credit invisibles
now have access to credit and more than half a billion dollars has been
invested into minority depository institutions,” Acting Comptroller of the
Currency Michael Hsu said in the release. “As we tackle additional barriers
that prevent full, equal, and fair participation in the nation’s economy, we’ve
made structural changes to Project REACh so we can sharpen our efforts and
leverage new opportunities.”
With the launch of REACh 2.0, working groups will replace
workstreams and focus on place-based initiatives; underserved and disadvantaged
populations; technology; and tools, products, and services. Existing REACh
projects will transition to the new working groups. Learn more here.
NCUA releases Q1 state-level data report
The National Credit Union Administration (NCUA) released its
state-level data report for the first quarter, indicating a decline in assets,
shares and deposits among federally-insured credit unions to begin the year.
This decline came with a 4 percent increase in loans outstanding and
delinquencies grew at the median, according to the report. Median assets
declined by 0.8 percent and shares and deposits dropped by 2.1 percent,
according to the report.
During the previous year, loans grew by 13.3 percent at the
median. The median total delinquency rate was 53 basis points at the end of the
first quarter this year, compared with 38 basis points at the end of the first
quarter of 2023. The full report is available here.