Sector developments and company hires

GSE scorecard released

The FHFA has released the 2022 Scorecard for Fannie Mae, Freddie Mac and Common Securitization Solutions (CSS). The purpose of the 2022 Scorecard is to hold the GSEs and CSS accountable for fulfilling their core mission requirements by promoting sustainable and equitable access to affordable housing and operating in a safe and sound manner.

The 2022 Scorecard focuses on specific enterprise goals that address affordability, fair lending and equity, in addition to promptly addressing examination and supervision findings, and ensuring sufficient liquidity to sustain the GSEs through severe stress events. It also ensures that the enterprises prioritise climate risk, as well as the principles of diversity and inclusion, throughout their decision-making processes. 

“Key to the enterprises fulfilling their statutory mandates is their ability to advance sustainable and affordable homeownership and rental housing opportunities, and to improve their capital position by transferring credit risk away from the taxpayer,” comments FHFA acting director Sandra Thompson.

In other news…

EMEA

Synthetic Libor usage confirmed

The UK FCA has confirmed it will allow the temporary use of ‘synthetic’ sterling and yen Libor rates in all legacy Libor contracts, other than cleared derivatives, that have not been changed by 31 December 2021. These synthetic rates will not be available for use in any new contracts. Many contracts that use Libor have already been switched to new risk-free overnight interest rate benchmarks or will do so at end-2021. But there is a risk of disruption to markets and consumers if interest payments in Libor loans, mortgages, bonds and other contracts that have not switched by end-2021 cannot be calculated. As a result, the FCA is requiring the publication of one-, three- and six-month Libor rates for sterling and Japanese yen on a synthetic basis until the end of 2022, to allow more time to complete transition. Although five US dollar Libor settings will continue to be calculated by panel bank submission until end-June 2023, the FCA has also confirmed that the use of US dollar Libor will not be allowed in most new contracts written after 31 December 2021.

North America

SitusAMC has announced the launch of its new insurance services branch, Securent. The new subsidiary will offer risk management and insurance programmes for mortgage and MBS stakeholders in a bid to increase profits and mitigate risk for RMBS sellers, issuers and investors. Justin Vedder will lead SitusAMC’s new insurance business, with over 20-years of experience in the mortgage banking and insurance industry and having previously served as svp of the national sales team at Altisource. Securent programmes will include loan defect insurance, mortgage application fraud insurance for RMBS, and are hoping to launch MSR loan defect insurance in the future.