In the Federal Housing Finance Agency's annual report to Congress, the agency requested the authority to examine third-party service providers to identify practices that could pose safety and soundness risks to Fannie Mae and Freddie Mac.

'The Enterprises' exposure to non-bank seller/servicers has grown significantly since 2008,' said FHFA Director Mark Calabria. 'Non-banks, which operate outside the federal prudential regulatory system, are expected to service most of the Enterprises' portfolios in 2021. A limited and tailored grant of examination authority should position FHFA to achieve its statutory mandate to ensure the safe and sound operations of the regulated entities as housing finance continues to evolve.'

Calabria also urged lawmakers to grant FHFA chartering authority, which would enable it to charter competitors to Fannie and Freddie, and to amend or remove statutory capital definitions to enable FHFA to simplify its capital rule.

The report also included a comprehensive overview of the steps FHFA has taken to respond to the coronavirus pandemic, the work it has done regarding climate and natural disaster risk and how it is preparing Fannie Mae and Freddie Mac to exit conservatorship.

(C) 2021 Electronic News Publishing, source ENP Newswire