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FHFA Planning for the Future: Policies, Procedures, and GSEs

shutterstock_260704028The Federal Housing Finance Agency (FHFA) released its Strategic Plan for the fiscal years of 2018 through 2022, in which it outlined three strategic goals that it plans on implementing in its continued effort to serve the housing market.

Strategic Goal 1: Ensuring Safe and Sound Regulated Entities 

According to the report, the FHFA uses a uniform risk-based approach in its supervision, in which it examines regulated entities activities and assesses the amount of financial risk that activity may hold for the institution. Examinations occur on an annual basis, as well as targeted examinations, and, if need be, off-site reviews. In this respect, two ratings are assigned: a composite rating on overall well-being of the institution, and individual rankings of components, including capital, asset quality, management, earnings, liquidity, sensitivity to market risk, and operational risk.

Strategic Goal 2: Ensure Liquidity, Stability, and Access in Housing Finance

The FHFA says it has, “the statutory obligation to ‘foster liquid, efficient, competitive, and resilient national housing finance markets,’” In the realm of Federal Home Loan Banks, the FHFA will ensure that these local branches will fulfil their obligation in providing liquidity to their members.

The FHFA will also require both Fannie Mae and Freddie Mac (GSEs) to engage in actions that improve liquidity in the single-family housing market, improve servicing standards and expand foreclosure prevention practices, and continue to serve in the multifamily and affordable housing market.

Strategic Goal 3: Manage the Enterprises Ongoing Conservatorship

In this respect, the FHFA will use its conservatorship over the GSEs to ensure that their infrastructure promotes maximum mortgage credit availability and assist homeowners facing hardship while minimizing taxpayer loss. It will also maintain clear standards and expectations for managing executives at the GSEs, and ensure the replacement of exiting officials in a timely manner.

To read the full, 22-page outlook on how the FHFA will fulfil its obligations to the housing community, click here.

About Author: Joey Pizzolato

Joey Pizzolato is the Online Editor of DS News and MReport. He is a graduate of Spalding University, where he holds a holds an MFA in Writing as well as DePaul University, where he received a B.A. in English. His fiction and nonfiction have been published in a variety of print and online journals and magazines. To contact Pizzolato, email joseph.pizzolato@thefivestar.com.

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