The
The notice is intended to communicate FHFA's supervisory expectations for
'Enterprise-wide risk management policies and procedures should be commensurate with [Fannie and Freddie]'s risk appetite and based on an assessment of seller/servicer financial strength and MSR risk exposure levels,' according to the bulletin, which also noted that although seller/servicers assign values to their MSRs,
The advisory includes guidance on objective evaluation of MSR values; MSR valuations for mortgage loans owned or guaranteed by the Fannie and Freddie and stress testing; MSR valuations for mortgage loans not owned or guaranteed by the enterprises; market data input; use of third-party providers; frequency of evaluations; and discount to MSR values when servicing rights are terminated.
(C) 2023 Electronic News Publishing, source