Government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac have set new operational and financial eligibility requirements for all current and potential single-family mortgage seller-servicers, the Federal Housing Finance Agency (FHFA) recently announced.
The new requirements, which become effective no later than Sept. 1, and the financial requirements, which become effective Dec. 31, are ‘intended to help ensure the safe and sound operation of the enterprises and provide greater transparency, clarity and consistency to industry participants and other stakeholders and reflect feedback received over the past several months,’ the FHFA says in a statement.
The rules were first introduced in January.
‘These updated operational and financial requirements will help mitigate risks associated with changes in the servicing industry,’ says Mel Watt, director of the FHFA, in a statement. ‘Strengthened enterprise servicer counterparty standards should also improve access to credit and protect taxpayers by reducing market uncertainty about the enterprises' expectations for mortgage servicer counterparties.’
Under the new rules, all seller-servicers must have a minimum net worth of $2.5 million plus one-quarter of 1% of the unpaid principal balance for serviced mortgages. In addition, non-bank seller-servicers must have a capital ratio of at least 6%.
There are also liquidity requirements, including a rule that non-banks must retain minimum liquidity of 3.5 basis points of total agency servicing unpaid balances.
Compliance with the new rules will be reviewed each quarter.