Keeping an Eye on the Agencies

September 28, 2020

Orion’s management is keeping tabs on developments surrounding the FHFA (Federal Housing Finance Agency, the conservator of Freddie Mac and Fannie Mae). Last week the FHFA published an updated strategic plan for fiscal years 2021-2024 reminding us of FHFA’s ongoing and future efforts to oversee and reform the GSEs, as well as improve its own operations. What should brokers understand, and how might it impact their business next year and going forward?

The plan provides a roadmap of FHFA Director Mark Calabria’s priorities for FHFA, Fannie Mae, Freddie Mac, and the Federal Home Loan Banks in the coming years. Our brokers should know that the objectives contained within the strategic plan will guide FHFA’s actions as conservator and regulator, which in turn will have a significant impact on the health of the mortgage market.

The good news is that many of the reforms identified in the strategic plan align with those supported by mortgage trade groups, including NAMB and MBA, including “a fair playing field for large and small lenders,” steps to ensure the activities of the GSEs “stay within the bounds of their charters,” and a well-functioning Uniform MBS that is “widely accepted by market participants.” These are good things for Orion’s brokers, since you don’t Fannie or Freddie taking your business, and you always want investor demand for the loans you produce.

On the flip side, Orion’s brokers should also know that, basically, FHFA Director Mark Calabria is not a fan of Fannie or Freddie, especially of either being under government control. FHFA’s strategic plan notes its intention to “responsibly end the conservatorships” of Fannie Mae and Freddie Mac, as well as its desire for greater examination authority with respect to nonbank servicers.

The FHFA will accept public comments on the strategic plan through October 5, 2020. Orion is encouraging brokers to, at a minimum, skim the document and submit comments here: If we don’t speak up about something we don’t like, who will?

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