DS News - U.S. Bank

32 FHFA'S THREE GOALS OVER THREE YEARS Sustainability is the focus of the Federal Housing Finance Agency's (FHFA's) Office of Minority and Women Inclusion (OMWI) Strategic Plan, which outlines OMWI's plan for leading diversity and inclusion and equal employment-opportunity efforts at the FHFA and diversity and inclusion (D&I) efforts at Fannie Mae, Freddie Mac, and the Federal Home Loan Bank System, which includes 11 banks and the Office of Finance. Over the past three years, the FHFA said it has worked to develop the foundations on which it has built its present strategic plan for the period 2019–2021. During that time, Sharron P.A. Levine, Director of OMWI, said that the FHFA had implemented a "comprehensive OMWI operational structure, launched government-leading D&I examination program, and developed clear diversity, inclusion, and equality standards." "With these core building blocks in place, we are focused on the next stage of the FHFA's D&I evolution—ensuring that diversity, inclusion, and equality are integral parts of the cultural consciousness and the daily business, human capital, and cultural activities of FHFA and its regulated entities," Levine wrote in a message outlining the agency's strategic plan. To ensure the sustainability of the plan, the FHFA said that it plans to focus on three goals over this three-year period: 1) strengthening the understanding of diversity, inclusion, and equal opportunity to drive cultural awareness; 2) delivering meaningful diversity and inclusion communication; and 3) ensuring OMWI organizational sustainability. While the first goal is aimed at empowering a culture of diversity and inclusion at the FHFA and the entities under its conservatorship, the agency plans to engage stakeholders in its D&I mission and communicate the inherent benefits and opportunities in achieving the D&I objectives. e FHFA plans to develop strategic tools, policies, and services that support the long- term sustainability and effectiveness of its D&I mission to achieve its third goal. e plan also revealed that the agency's annual operational plans would identify specific strategies and define both organizational and individual performance goals to accomplish the OMWI Strategic Plan in alignment with the strategic goals identified in the FHFA's Strategic Plan for FY 2015–2019. e three goals are tied in to help the agency advance and achieve its strategy for 2018–2022, especially its strategy of ensuring liquidity, stability, and access in housing finance. TEN YEARS OF TRANSFORMATION Freddie Mac has come a long way from the time it was taken under conservatorship in 2008 and reported a strong and stable third quarter during its earnings announcement. e government-sponsored enterprise (GSE) which completed 10 years under conservatorship this year, reported a comprehensive income of $2.6 billion driven primarily by "stable business revenues and strong credit quality." is included a $0.2 billion (after-tax) net benefit from single- family legacy asset dispositions and a $0.2 billion (after-tax) benefit from reducing the write-down of the net deferred tax asset from the tax-reform legislation last year. Freddie Mac said that it would also fulfill its $2.6 billion dividend requirement to the U.S. Treasury in December and that it had made cumulative payments totaling $114 billion to the Treasury to date. "e third quarter marked another very good quarter for Freddie Mac, with comprehensive income of $2.6 billion. is continues our growing quarterly track record of producing stable and strong earnings, all while responsibly supporting the company's mission and reducing taxpayer exposure to our risks," said Donald Layton, CEO, Freddie Mac. "As we look back on our 10 years in conservatorship, these results make clear that Freddie Mac is a transformed company that plays a key role in reforming and improving America's housing finance system." e GSE also reported strong business fundamentals that helped it to grow during the quarter. Its total guarantee portfolio grew 6 percent to $2.1 trillion, while its single- family total originations decreased 6 percent to $231 billion. ough its refinance volume decreased 30 percent, Freddie Mac reported a 12 percent increase in its purchase volume. Single-family serious delinquency rates decreased to their lowest levels in a decade during the quarter to 0.73 percent, the GSE said, implying strong credit quality. Its single- family credit guarantee portfolio increased from the prior quarter to $1,875 billion. In the single-family market, Freddie Mac further reduced taxpayer exposure to credit risk by reducing its conservatorship capital framework (CCF) capital needed for credit risk by around 60 percent through credit risk transfer (CRT) transactions during the year. It recently introduced an enhanced CRT structure designed to reduce CCF capital needed for credit risk by approximately 80 percent on related new originations. Freddie Mac said that its total CCF capital declined $7.1 billion, or 12 percent, from the prior year quarter, "reflecting house- price growth plus management actions, such as disposing of legacy assets and transferring credit risk." During the year, Freddie Mac said that it expanded opportunities for U.S. homebuyers and renters by providing around $286 billion in liquidity to the mortgage market, funding more than 992,000 single-family homes and around 551,000 multifamily rental units. Breaking down the demographics for its products, the GSE said that first-time homebuyers represented more than 46 percent of new purchase loans, while 94 percent of the eligible multifamily rental units financed were affordable to families earning at or below 120 percent of area median incomes.

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