The Federal Housing Finance Agency or FHFA, which regulates Fannie Mae and Freddie Mac, Monday released the 2013 Conservatorship Scorecard for the mortgage giants, detailing the specific priorities for the two firms.
The companies will contract the Enterprises dominant presence in the marketplace while simplifying and shrinking some operations by lines of business. These actions will carry a 50 percent weight.
According to the regulator, each ''enterprise will demonstrate the viability of multiple types of risk transfer transactions involving single family mortgages with at least $30 billion of unpaid principal balances in 2013.''
They will reduce the unpaid principal balance amount of new multifamily business by at least 10 percent relative to 2012, by tightening underwriting, adjusting pricing and limiting product offerings, and will not increase the proportion of the Enterprises' retained risk.
The December 31, 2012 retained portfolio balance will be reduced by selling 5 percent of assets.
The two companies will build a new infrastructure for the secondary mortgage market, which will carry a 30 percent weight. They will continue the foundational development of the Common Securitization Platform or CSP in conjunction with FHFA.
While establishing the initial ownership and governance structure for the CSP, they will develop the design, scope and functional requirements for the CSP's modules.
Fannie Mae and Freddie Mac will develop and begin testing the CSP and support FHFA progress reports to the public on the design, scope and functional requirements.
The two firms will also continue the development of the Contractual and Disclosure Framework or CDF to meet the requirements for investors in mortgage securities and credit risk.
They will also maintain foreclosure prevention activities and credit availability for new and refinanced mortgages, which will have a 20 percent weight.
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