Fannie Mae-No Politics (FNMA)

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FHFA IG Worries About Nonbank Risk (Again), Cyber Attacks, More

By Paul Muolo [e-mail]

In its new semi-annual report to Congress, the independent watchdog of the GSEs and their regulator expresses concern about the ?increased risk? that nonbanks pose to Fannie Mae and Freddie Mac, and more ? including potential cyber attacks on their computer systems.
The Inspector General of the Federal Housing Finance Agency points to what most of the mortgage industry has known for years ? that an increasing share of loan purchases by the GSEs are coming from nonbanks. But more prominently, the IG worries that nonbanks ?may not have the same financial strength, liquidity or operational capacity as larger depository institution counter-parties.?

(The report comes on the eve of new and final capital standards for seller/servicers being unveiled by the FHFA.)

In response to its anxiety, the IG plans a series of audits that will study the risks posed by an increasing volume of nonbank loan sales. (Some of these audits have already commenced.)
The IG also will study what it calls the ?adequacy? of the FHFA?s oversight of how Fannie and Freddie control their nonbank risk. For more information, see the upcoming edition of Inside The GSEs.