Join us on LinkedIn Follow us on Twitter Like us on Facebook Follow us on Instagram
 
  OCTOBER RESEARCH STORE Already a subscriber? LOG IN
AddControlToContainer_DynamicNavigation6

FHFA announces advisor, servicing standards

Email A Friend Printer Friendly Version
0 comments
Tuesday, February 25, 2020
It’s been a busy couple of weeks for the Federal Housing Finance Agency (FHFA), which announced a financial advisor to help the process of ending conservatorship for Fannie Mae and Freddie Mac, opened up the process for evaluating new credit score models, updated servicer requirements and realigned the agency’s structure.

First up, FHFA announced it had selected Houlihan Lokey Capital, Inc. as a financial advisor to assist in the development and implementation of a roadmap to end conservatorships. In addition to developing the roadmap, Houlihan Lokey will consider business and capital structures, market impacts and timing, and available capital raising alternatives, among other items as outlined in the previously published Statement of Work.

“Hiring a financial advisor is a significant milestone toward ending the conservatorships of the enterprises,” FHFA Director Mark Calabria said in a release. “The next major milestone for FHFA is the re-proposal of the capital rule, which will happen in the near future.”

The contract amount for Houlihan Lokey in the first year is $9 million. FHFA has options to extend for an additional four-and-a-half years, with the total contract not to exceed $45 million.

FHFA also had been looking into alternative credit score models, and published a solicitation for a joint credit score.

The Credit Score Solicitation describes the process for credit score model developers to submit applications to Fannie and Freddie, which will begin accepting applications May 18. The application period will be open for 120 days, ending Sept. 15. 

“The publication of the solicitation is the first step in the process of evaluating new credit score models,” Calabria said. “FHFA will ensure that the enterprises validate and approve credit score models in a timely and prudent manner, so that Americans continue to have a safe and sound path to sustainable homeownership.”

Servicers who do business with Fannie and Freddie also have updated minimum financial eligibility requirements to meet.

The updated minimum financial requirements will provide transparency and consistency of capital and liquidity required for seller/servicers with different business models, FHFA said in a release.

A key improvement from the minimum financial requirements established in 2015 is that the new standards establish financial requirements for the servicing of Ginnie Mae mortgages.

The proposal keeps the minimum net worth for servicers at $2.5 million, and the 25 basis points of unpaid principal balance (UPB) for 1-4 unit residential mortgage loans which are not serviced by Ginnie Mae. For Ginnie Mae servicing, the requirements rise to 35 basis points of UPB.

Base liquidity would rise from 3.5 basis points of agency servicing UPB to 4 basis points, plus 10 basis points of Ginnie Mae servicing UPB.

The threshold for non-performing loans (NPL) moves from greater than 6 percent requiring an incremental NPL charge to greater than 4 percent. The incremental charge would increase from 200 basis points for the portion of agency NPL above 6 percent to 300 basis points for the portion of agency NPL above 4 percent.

After reviewing industry and stakeholder feedback, FHFA anticipates finalizing these requirements in the second quarter of 2020, and anticipates that the requirements will be effective six months after they are finalized. 

Finally, Calabria announced that the agency itself was undergoing change, with a realignment of its structure, which includes new hires.

Realignment actions include:

  • Establishing three new units that report directly to the director: The Division of Research and Statistics (DRS) headed by Deputy Director Lynn Fisher, the Division of Accounting and Financial Standards (DAFS) headed by Deputy Director Nina Nichols, and the Office of Equal Opportunity and Fairness (OEOF);
  • Hiring a new deputy director, Paul Miller, and associate director, Scott Valentin, for the Division of Enterprise Regulation (DER);
  • Elevating four key positions:
    • In the Office of General Counsel, Christopher Curtis will be principal deputy general counsel, and Sean Dent will be senior deputy general counsel;
    • In DRS, Anju Vajja will be senior associate director for policy research; and
    • In the Office of Minority and Women Inclusion, Paul Priest will be associate director for diversity and inclusion and administration;
  • Renaming the Division of Conservatorship (DOC) the Division of Resolutions (DOR); and
  • Recruiting an OEOF director, a chief economist, a senior associate director for data, and a chief operating officer.

“The revised structure and appointments of highly qualified senior leaders will ensure that FHFA continues to protect taxpayers from future bailouts and deliver on our obligation to create a competitive, liquid, efficient and resilient housing finance market,” Calabria said.

Today's other top stories
Powell testifies to Congress about trade policy impacts on interest rates
CFPB outlines new approach to criminal enforcement referrals
How changing consumer behavior has led to a ‘new normal’ in credit scoring
Banking agencies seek feedback on capital standards revisions
Trades signal support for modernized payments, bond programs


COMMENT BOX DISCLAIMER:
October Research is not responsible for the comments posted on its websites by readers. We will do our best to remove comments that include profanity or personal attacks or other inappropriate comments.
Comments:

Be the first to leave a comment.

Leave your comment
Please enter a comment.
CAPTCHA Validation
CAPTCHA
Code:
Please enter the word displayed in the image above. Please enter the word displayed in the image above.
: 
Please enter your name.
: 
Please enter your email address.
This field must contain a valid email address.
Your Email is for reporting purposes only. It will NOT be displayed.
Popularity:
This article has been viewed 2707 times.

Monthly Newsletter

Dodd Frank Update July 2025

Cover Story:

Former CFPB attorneys say state CFPA rights are for the courts to decide


News by Topic   News by Edition   News by Agency   News by Industry   In-depth Reports   Events
Banking
Case Law
Conference Coverage
Consumer Protection
Data Privacy
Financial Stability
Industry Spotlight
Legislation
Nonbank Financial
The TRID Journey
 
Dodd Frank Update June 2025
Dodd Frank Update July 2025
Archives
 
CFPB NCUA
CFTC OCC
FDIC OFR
FHFA SEC
FRB States
FSOC Treasury
FTC  
 
Appraisal
Broker-Dealer
Community Banks & Credit Unions
Land Title
Mortgage
Payday Lending
 
2025 State of the Industry
CRA and Affordable Housing
2025 State of the Industry
Who's My Regulator?
Fair Lending
Mortgage Technology
Marketing Compliance for Lenders
Archives
 
National Settlement Services Summit (NS3)
Women's Leadership Summit (WLS)
Webinars

Library   About   Subscribe   Other Publications
Data Privacy Vault Court Actions
Keys to Real Estate podcast Enforcement Documents
Blog - Tuesdays with Mary Guidance Documents
1071 Compliance Guide White Papers
eClosing Solutions Showcase Position Papers
Executive Interview Series Legislation
Lender Associations Regulations
The Dodd-Frank Act Reports, Studies and Surveys
Dodd-Frank Summary & History Federal Register Notices
 
Dodd Frank Update
Contact / Editors
Advertise
Request a Media Kit
Social Media
Are You An Expert?
Subscriber Agreement
 
Subscriptions
Free Email Updates
Try a Free Edition
 
The Title Report
The Legal Description
Valuation Review
RESPA News
Copyright © 2011-2025 Dodd Frank Update
An October Research, LLC publication
3046 Brecksville Road, Suite D, Richfield, OH 44286
(330) 659-6101, All Rights Reserved
www.doddfrankupdate.com | Privacy Policy
VISIT OUR OTHER WEBSITES
> The Legal Description
> RESPA News
> The Title Report
> Valuation Review
> NS3 The Summit
> Women's Leadership Summit
> October Research, LLC
> The October Store


Loading... Loading...
Featuring:
  • Delivery 3X a week plus breaking news as it happens
  • Comprehensive title insurance industry news
  • Recent acquisitions, mergers, real estate stats
  • Exclusive in-depth coverage of the industry's hottest stories
Featuring:
  • Delivery 2X a week plus breaking news as it happens
  • Comprehensive Dodd-Frank coverage
  • The latest information from the CFPB
  • Full coverage of Congressional hearings
  • Updates on all agency actions
  • Analysis of controversial provisions
  • Release of newest studies and reports
Sign up today and...
  • Be one of the first to know where NS3 is being held
  • Learn about NS3 speakers and sessions
  • Save on registration with Super-Early Bird rates
  • Discover the networking opportunities NS3 offers
  • Find out if CE credits will be offered for your area
  • And much more
Featuring:
  • Delivery 2X a week plus breaking news as it happens
  • Preview the latest RESPAnews.com Top Story
  • RESPA related headline news
  • Quote of the Week
Featuring:
  • Delivery 2X a week plus breaking news as it happens
  • Legal, regulatory and legislative information impacting the settlement services industry
  • News from HUD, Congress, state legislatures and other regulatory agencies
  • Follow the lobbying efforts of all the major national real estate services organizations.
Featuring:
  • Delivery 2X a week plus breaking news as it happens
  • The industry's only full-time newsroom
  • Relevant, up-to-date appraisal industry news
  • Covering the hottest stories and industry trends
NEWS BY TOPIC
EDITION
AGENCY
IN-DEPTH REPORTS
INDUSTRY
EVENTS
LIBRARY
EMAIL UPDATES
ABOUT
SUBSCRIBE
Banking
Case Law
Conference Coverage
Consumer Protection
Data Privacy
Financial Stability
Industry Spotlight
Legislation
Nonbank Financial
The TRID Journey
Current Edition
June 2025
May 2025
April 2025
Archives
CFPB
CFTC
FDIC
FHFA
FRB
FSOC
NCUA
OCC
OFR
SEC
States
Treasury
2025 State of the Industry
Real Estate Compliance Outlook
CRA and Affordable Housing report
Who's My Regulator?
Fair Lending
Marketing Compliance for Lenders
Archives
Appraisal
Broker-Dealer
Community Banks & Credit Unions
Land Title
Mortgage
Payday Lending
National Settlement
Services Summit (NS3)
Women's Leadership
Summit (WLS)
Webinars
2025 Economic Outlook Series
CFPB's Shake-Up & Its Impact on You
Data Privacy Compliance
Fintech Partner Compliance
Strategies post-NAR settlement
Industry and Regulatory Outlook
Securing Your Cyber Network
Compliant Marketing Tactics
2024 Economic Forecast Series
Webinar Archives
Data Privacy Vault
Keys to Real Estate podcast
Blog - Tuesdays with Mary
1071 Compliance Guide
eClosing Solutions Showcase
Executive Interview Series
Lender Associations
The Dodd-Frank Act
Dodd-Frank Summary
Court Actions
Enforcement Documents
Guidance Documents
White Papers
Position Papers
Legislation
Regulations
Reports, Studies and Surveys
Federal Register Notices
Proposals
Final Rules
GAO
Agency
Contact Us
Advertise
Request a Media Kit
Social Media
Are You An Expert?
Subscriber Agreement