MReport November 2017

TheMReport — News and strategies for the evolving mortgage marketplace.

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56 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST GOVERNMENT FHFA Planning for the Future The agency recently outlined its policies, procedures, and plans for the GSEs through 2022. T he Federal Housing Fi- nance Agency (FHFA) released its Strategic Plan for the fiscal years of 2018 through 2022, in which it outlined three strategic goals that it plans on implementing in its continued effort to serve the housing market. Strategic Goal 1: Ensuring Safe and Sound Regulated Entities According to the report, the FHFA uses a uniform risk-based approach in its supervision, in which it examines regulated entities' activities and assesses the amount of financial risk those activities may hold for the institu - tion. Examinations occur on an annual basis, as well as targeted examinations, and, if need be, off- site reviews. In this respect, two ratings are assigned: a composite rating on overall well-being of the institution, and individual rankings of components, including capital, asset quality, management, earnings, liquidity, sensitivity to market risk, and operational risk. Strategic Goal 2: Ensure Liquidity, Stability, and Access in Housing Finance The FHFA says it has "the statutory obligation to 'foster liquid, efficient, competitive, and resilient national housing finance markets.'" In the realm of Federal Home Loan Banks, the FHFA will ensure that these local branches will fulfil their obligation in pro - viding liquidity to their members. The FHFA will also require both Fannie Mae and Freddie Mac (GSEs) to engage in actions that improve liquidity in the single-family housing market, improve servicing standards, and expand foreclosure prevention practices, and continue to serve in the multifamily and affordable housing market. Strategic Goal 3: Manage the Enterprises Ongoing Conservatorship In this respect, the FHFA will use its conservatorship over the GSEs to ensure that their infra- structure promotes maximum mortgage-credit availability and assist homeowners facing hard- ship, while minimizing taxpayer loss. It will also maintain clear standards and expectations for managing executives at the GSEs, and ensure the replacement of ex - iting officials in a timely manner. Equifax: Congress Presses for Answers During the hearing, Richard Smith took full responsibility as former CEO for what happened on his watch. F ormer Equifax CEO Richard E. Smith testified before the U.S. House Committee on Energy and Commerce last month. Smith served as the Chairman and CEO of Equifax for the last 12 years. He stepped down on September 25 in the wake of the data breach. During the hearing, Smith opened with remarks from his prepared testimony, where he took full responsibility as former CEO for what happened on his watch. "Equifax was entrusted with Americans' private data and we let them down," Smith said. "To each and every person affected by this breach, I am deeply sorry that this occurred." Smith continued, "The people affected by this are not num - bers in a database. They are my friends, my family, members of my church, the members of my community, my neighbors." Despite his apologetic nature, the committee before him wasn't merciful. During the hearing, Janice Schakowsky (D-Ill.) said that Equifax deserved to be shamed. In addition, Rep. Greg Walden (R-Ore.) said, "We're here today to do what Equifax hasn't done the last few months, and that's put their customers first." Smith's testimony notes that the breach occurred because of both "human error and technol - ogy failures." In response, Walden said, "I don't think we can pass a law that, excuse me for saying this, fixes stupid." Rep. Joe Barton (R-Texas) was also skeptical of Smith, as he said that a law should be set that would fine Equifax for every consumer who's been affected by the breach. "You're really just required to notify everybody and say so sor - ry, so sad," Barton said to Smith. "It seems to me you might pay a little more attention to security if Equifax were required to pay every consumer who was affected several thousand dollars." "We could have this hearing every year, from now on, if we don't do something to change the current system," Barton said. Congress also questioned Smith on why three Equifax executives sold company stock shortly after the data breach, why it took so long for the company to inform the public, and what the company plans to do to better the future. "Equifax was entrusted with Americans' private data and we let them down. To each and every person affected by this breach, I am deeply sorry that this occurred." —Richard E. Smith, former Equifax CEO

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