Page 40 - July-August 2018 GSE Report Flip Book

FANNIE MAE AND FREDDIE MAC JJUALN. U- ARUYG. 22001188
• State-level policy and regulatory differences across key components of the mortgage lifecycle create compliance uncertainty for lenders and servicers, increase costs, and inhibit the wider adoption of experience- and process-enhancing innovations;
• The use of the FCA to impose civil liability for violations of mortgage origination and servicing requirements has likely contributed to the exit of traditional commercial lenders from federal mortgage programs, raising the cost and limiting borrower access to mortgage credit for federally insured or guaranteed loans;
• Differences across loss mitigation programs and processes for federally supported mortgages, including those guaranteed or insured by the GSEs, Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA), and U.S. Department of Agriculture (USDA), have the potential to negatively impact borrowers during periods of financial hardship and could slow loss-mitigation responses during a subsequent period of sustained financial stress; and
• Federally supported mortgage programs exposed to nonbank counterparty credit risk could benefit from increased transparency into these counterparties’ financial condition through greater standardization and reporting of key enterprise business and financial metrics.
[Editor’s comment: Treasury provided the following recommendations, focused on modernizing the mortgage origination process and reforming regulations to facilitate the digitization of mortgage lending.]
...Recommendations [for electronic mortgage notes]
Treasury recommends that Ginnie Mae pursue acceptance of eNotes and supports the measures outlined in its Ginnie Mae 2020 roadmap to more broadly develop its digital capabilities.
FHA is limited by its congressionally appropriated budget but is in need of technology overhauls beyond the narrower discussion of digital mortgage capabilities. Treasury recommends that Congress appropriate for FHA the funding it has requested for technology upgrades in the President’s Fiscal Year 2019 Budget — a portion of which FHA
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