MBA Statement on FHFA and Ginnie Mae’s Joint Announcement of Capital, Liquidity, and Net Worth Requirements for Seller/Servicers and Issuers
Bob Broeksmit, CMB, President and CEO of the Mortgage Bankers Association (MBA), issued the following statement on the Federal Housing Finance Agency (FHFA) and Ginnie Mae’s joint announcement today regarding updates to the capital, liquidity, and net worth requirements for Fannie Mae and Freddie Mac (the GSEs) seller/servicers and Ginnie Mae issuers:
“We appreciate FHFA and Ginnie Mae for their collaboration on this proposal, which reflects a significant amount of MBA’s feedback to the existing and previously-proposed rules. Of particular note, we are pleased that FHFA will now allow a significant portion of the unused committed agency servicing advance lines of credit to count toward the liquidity requirements. In addition, the agencies significantly reduced and recalibrated the “origination liquidity” requirements to better reflect expected margin call risk.
"Importantly, FHFA and Ginnie Mae also extended the implementation timeline to provide servicers sufficient runway to adjust to the new requirements. Other proposed changes that MBA had supported during the comment phase were also preserved in the final rule, including eliminating the procyclical liquidity requirement for nonperforming loans and recognizing differences in remittance types. Finally, we appreciate that FHFA and Ginnie Mae will align most, although not all, of their standards. Additional analysis will be needed to fully assess the impact, and we will work with FHFA and Ginnie Mae to ensure the requirements are properly calibrated.
“These requirements play a substantial role in the financial planning and risk management practices of institutions that originate and service GSE- and Ginnie-backed loans. MBA has long acknowledged the importance of ensuring stability and resiliency in the mortgage sector, while also noting the need for any such requirements to be tailored appropriately to the risks presented in the market.
“We look forward to continuing to work with our members and FHFA, Ginnie Mae, and the GSEs on any questions or issues that arise during implementation of these new guidelines to ensure that our mortgage system remains safe and sound and that affordable, sustainable mortgage credit remains available for all qualified borrowers.”