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FHFA’s 2018 Goals: Liquidity, Stability, Access in Housing Finance

The Federal Housing Finance Agency [1] (FHFA) released its strategic four-year plan from 2018 to 2022 reflecting the agency’s priorities as the regulator of the Federal Home Loan Banks (FHLBank) and as conservator of Fannie Mae [2] and Freddie Mac [3].

The agency’s strategic plan [4] centers around three key goals—ensuring safe and sound regulated entities; ensure liquidity stability, and access in housing finance; and managing the ongoing conservatorships of Fannie Mae and Freddie Mac (the GSEs).

To ensure the liquidity, stability and access in housing finance, the agency will look at ensuring liquidity in mortgage markets, promote stability in the housing finance markets and expand housing finance for qualified financial institutions of all sizes across the U.S. and for qualified borrowers.

FHFA plans to achieve these goals by promoting actions by the GSEs to maintain liquidity in the single-family secondary market for purchase money and refinance mortgages; ensuring the FHLBanks continue to provide advances in a safe and sound manner in support of member liquidity; monitor access to mortgage credit; supporting multifamily housing needs with a focus on the affordable and underserved segments of the market; and collaborating with other federal regulators to identify and address risk and other emerging issues.

To ensure safe and sound regulated entities the FHFA plans to assess the safety and soundness of their operations of the FHLBank system, identify risks and set expectations for strong risk management, and require timely remediation of risk management weaknesses for FHLBanks. It plans to achieve these targets through initiatives that include off-site analysis of key risk areas to strengthen supervision, identify supervisory concerns and monitoring emerging risks, industry trends, supervisory standards, and macro-economic market conditions.

To manage its ongoing conservatorship of the GSEs, FHFA plans to preserve and conserve assets of the GSEs, reduce taxpayer risks from GSE operations, and build, implement, and operate a new single-family securitization infrastructure and implement the single security initiative.