The newly proposed eligibility requirements align the minimum financial requirements for mortgage seller and servicers to do business with Fannie Mae and Freddie Mac (the Enterprises). The proposed minimum financial requirements include net worth, capital ratio and liquidity criteria for the Enterprises’ Seller/Servicers.
The FHFA said the new requirements “ensure the safe and sound operation of the GSEs and further FHFA’s goal of fostering liquid, efficient, competitive and resilient national housing finance markets. FHFA is releasing the proposed criteria to provide greater transparency, clarity and consistency to industry participants and other stakeholders.”
According to the Wall Street Journal, the standards could affect the availability of mortgages to some borrowers because some nonbanks may need to divert resources to meet the requirements.
Nonbank mortgage companies that do business with the GSEs will need to have a minimum net worth of at least $2.5 million plus 0.25% of the unpaid principal balances of all the mortgages they service. The servicers will also need other liquidity requirements and a tangible net worth—excluding goodwill and other intangible assets—that is equal to at least 6% of the servicer’s total assets.
The FHFA is slated to finalize the requirements in the second quarter and anticipates that the requirements will be effective six months after they are finalized.
The Federal Housing Finance Agency (FHFA) has proposed new minimum financial eligibility requirements for Fannie Mae and Freddie Mac seller and servicers.