Washington Report

Advocacy Updates from Washington D.C.

FHFA Scorecard Includes Credit Scoring

On Dec. 15, 2016, the Federal Housing Finance Agency (FHFA) released its annual Scorecard for Fannie Mae and Freddie Mac (the government sponsored entities, or “GSEs”).  The Scorecard acts as an agenda for the GSEs by setting specific priorities for the two companies while in conservatorship.  FHFA maintained its three strategic goals:

  • Maintain, in a safe and sound manner, credit availability and foreclosure prevention activities for new and refinanced mortgages to foster liquid, efficient, competitive and resilient national housing finance markets;
  • Reduce taxpayer risk through increasing the role of private capital in the mortgage market; and
  • Build a new single-family securitization infrastructure for use by the Enterprises and adaptable for use by other participants in the secondary market in the future.

The scorecard also highlighted the need for the GSEs to conclude their assessment of updated credit score models and plan for implementation.  Additionally, FHFA set an expectation that credit risk sharing would take place on at least 90 percent of the total unpaid principal balance of new mortgages acquired by the GSEs though FHFA did not set a mandatory percentage for the amount of risk.

FHFA Conservatorship Scorecard