The Federal Housing Finance Agency (FHFA) recently released its Scorecard Progress Report, detailing major activities of Fannie Mae and Freddie Mac in 2018. The report includes information on how the GSEs contributed to achieving FHFA’s three strategic goals as conservator of the enterprises including maintaining foreclosure prevention activities and credit availability, reducing taxpayer risk, and building a new single-family securitization infrastructure.
Part of the Scorecard discusses FHFA’s plan for Fannie and Freddie to transfer a meaningful portion of credit risk on at least 90 percent of the unpaid principal balance. As part of this effort, Fannie Mae recently began marketing its 11th sale of re-performing loans as part of the company’s ongoing effort to reduce the size of its retained mortgage portfolio. The sale consists of 21,400 loans, having an unpaid principal balance of $3.3 billion, and is available for purchase by qualified bidders.
Meanwhile, Freddie Mac recently announced a $363 million non-performing loan (NPL) transaction, an auction of seasoned non-performing residential first lien whole loans held in Freddie Mac’s mortgage-related investments portfolio, the Scorecard Progress report stated.
As part of FHFA’s effort to build a single security platform, Common Securitization Solutions, LLC along with Fannie and Freddie are to implement the Single Security Initiative on the Common Securitization Platform for both Fannie Mae and Freddie Mac in the Q2 2019. As part of this implementation, Freddie Mac recently announced that its Investor Reporting Change Initiative (IRCI) will revise single-family investor reporting requirements, including moving the investor reporting cycle from mid-month to end-of-month and updating remittance cycles.
“We are making the changes to promote alignment and industry standards for the Uniform Mortgage Backed Security,” Freddie Mac stated. “In March, the FHFA issued a final rule that requires Fannie Mae and Freddie Mac to align programs, policies, and practices that affect the cash flows of ‘to-be-announced’ (TBA)-eligible Mortgage-Backed Securities.”
The agency statement indicated that this is a major step forward.