Banking

FHFA problems assistance on home mortgage maintenance rights for handling counterparty credit threat

The Federal Housing Finance Agency today launched an advisory on the assessment of home mortgage maintenance rights for handling counterparty credit threat. The notification is planned to interact FHFA’s supervisory expectations for Fannie Mae and Freddie Mac “to establish and implement risk management policies and procedures for monitoring and valuing seller/servicers’ mortgage servicing rights.” This publication just uses to MSRs for single-family mortgage and works April 1.

“Enterprise-wide risk management policies and procedures should be commensurate with [Fannie and Freddie]’s risk appetite and based on an assessment of seller/servicer financial strength and MSR risk exposure levels,” according to the publication, which likewise kept in mind that although seller/servicers designate worths to their MSRs, Fannie Mae and Freddie Mac “should have their own processes to evaluate the reasonableness of seller/servicer MSR values.”

The advisory consists of assistance on unbiased examination of MSR worths; MSR evaluations for mortgage owned or ensured by the Fannie and Freddie and tension screening; MSR evaluations for mortgage not owned or ensured by the business; market information input; usage of third-party service providers; frequency of examinations; and discount rate to MSR worths when servicing rights are ended.

Gabriel

A news media journalist always on the go, I've been published in major publications including VICE, The Atlantic, and TIME.

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