CHLA: FHFA Updated Seller Standards Could Have “Negative Real-World Consequences”

The Community Home Lenders Association (CHLA) sent a letter to the Federal Housing Finance Agency (FHFA) commenting on its proposed increases in financial requirements for Fannie and Freddie. In February, the FHFA proposed updated standards that mortgage lenders would have to meet in order to sell loans to or service loans on behalf of Fannie Mae and Freddie Mac. The standards were set in 2015 and have remained with little modification since then. The update is meant to strengthen required capital and liquidity for seller/servicers with different business models, as well as provide for more transparency and consistency, “by incorporating cost and risk assumptions that were not previously considered and re-evaluating modeling assumptions and inputs, given changes in the servicing…