FHFA Releases New Strategic Plan and Scorecard for Fannie Mae and Freddie

The Federal Housing Finance Agency (FHFA) yesterday released its 2019 Strategic Plan for the Conservatorships of Fannie Mae and Freddie Mac and a new 2020 Scorecard for Fannie Mae, Freddie Mac, and Common Securitization Solutions. The Strategic Plan provides a framework for how FHFA will guide Fannie Mae and Freddie Mac (the Enterprises) to fulfill their statutory missions, focus on safety and soundness, and prepare for a responsible end to the conservatorships. The Scorecard aligns the Strategic Plan with the Enterprises’ tactical priorities and operations, serving as an essential tool to hold the Enterprises accountable for the effective implementation of the Strategic Plan. 

"Our nation's mortgage finance system is in urgent need of reform," said FHFA Director Mark Calabria in a statement.  "The vision for reform articulated in the Strategic Plan and advanced in the Scorecard will serve borrowers and renters by preserving mortgage credit availability, protect taxpayers by ensuring Fannie Mae and Freddie Mac can withstand an economic downturn, and support a strong and resilient secondary mortgage market."

The strategic plan is broken into three goals designed to ensure the GSEs:

  • “Focus on their core mission responsibilities to foster competitive, liquid, efficient, and resilient (CLEAR) national ​housing finance markets that support sustainable homeownership and affordable rental housing;
  • Operate in a safe and sound manner appropriate for entities in conservatorship; and
  • Prepare for their eventual exits from the conservatorships.”

Additionally, the scorecard includes a detailed summary of how the agency plans to address issues related to the duty to serve requirements, the Common Securitization Platform, credit risk transfer, implementation of the alternative credit score finale rule, and the LIBOR transition.

In early September, the White House unveiled plans from Treasury and HUD designed to release the GSEs from federal control, charter new guarantors to compete with the GSEs and strengthen single-family borrower programs.

Treasury's Housing Reform Plan features specific legislative and administrative recommendations, including:

  • Creating an explicit catastrophic government guarantee on mortgage-backed securities issued by government-sponsored enterprises (GSE’s) Fannie Mae and Freddie Mac;
  • Giving the Federal Housing Finance Agency (FHFA) more discretion on regulatory capital requirements;
  • Chartering new guarantors to compete with GSEs;
  • Letting expire the CFPB's qualified mortgage patch;
  • Replacing the GSEs' statutory affordable housing goals with "more efficient, transparent, and accountable" programs; and
  • Having the FHFA work with bank regulators to address the "potentially unwarranted gap" between tough capital rules for banks that hold and service mortgages, and the less stringent ones for the GSEs.

Key provisions within HUD's Housing Finance Reform Plan include:

  • Strengthening Federal Housing Administration (FHA) programs for single-family borrowers;
  • Providing more regulatory certainty to FHA lenders;
  • Establishing FHA as an autonomous corporation within HUD;
  • Modernizing FHA technology;
  • Using Ginnie Mae's authority to end loan "churning"; and
  • Guaranteeing fee-setting flexibility for Ginnie Mae. 

CUNA and the state leagues continue to press Capitol Hill lawmakers to ensure that any housing finance reform scheme preserves credit unions’ access to a viable secondary mortgage market.