The Federal Housing Finance Agency moved forward on some of its
Certain changes to guarantees on uniform mortgage-backed securities, apartment loan exposures on government-subsidized buildings and interest-only securities are part of the finalized Enterprise Regulatory Capital Framework
But not all proposed updates to the framework advanced. Notably, it withdrew one related
"FHFA currently is not adopting the proposed modification to the procedure for selecting a representative credit score for a single-family mortgage exposure when multiple credit scores have been submitted for at least one borrower," the agency said.
The omission was prompted by mixed feedback about a plan to give mortgage companies the option to use two rather than the three credit reports when submitting loans to Fannie Mae and Freddie Mac.
In the proposal, the industry would have transitioned from using either the median of three scores from as many reports, or the lower of the number from two, to an average of either.
"FHFA proposed this modification to prevent a downward shift in representative credit scores under the current methodology once the enterprises require a minimum of two, rather than three, credit reports," the agency explained.
While that aspect of the proposal had supporters who've studied it and determined it wouldn't result in a material change for borrowers,
"In consideration of the delayed implementation date for the bimerge requirement and the ongoing public engagement related to credit scores, FHFA has determined to not adopt the proposed change to the calculation of representative credit scores at this time," the agency said.
"FHFA may, in the future, finalize this aspect of the proposed rule," it added.
The agency did move forward with part of the proposal that updates the score assumption to 680 for single-family mortgage exposures originated without a traditional debt-payment history.
Industry experts contacted at deadline were still reviewing the final rule's nuances.
But one expressed hope advancing the overall capital framework would help the enterprises move toward a point where profits wouldn't have to be swept to the Treasury, as they have been since conservatorship
"As one of the leading advocates in ending the profit sweep, CHLA commends FHFA for completing this rule making," said Scott Olson, executive director of the Community Home Lenders of America, in an emailed statement.
"However, it's important to remember that the main purpose of building capital is to enable Fannie and Freddie to aggressively fulfill their role of providing mortgage credit access to homeowners," he added.
