FHFA’s Strategic Plan Reflects the Agency’s Increased Focus on Fair Lending

The U.S. Federal Housing Finance Agency’s (“FHFA”) draft strategic plan, which we discussed in an earlier post, sets forth FHFA’s goals and objectives for the next four years. Unsurprisingly, FHFA’s recent focus on fair lending issues is reflected in the plan. Over the course of the past year, FHFA has made numerous strides in advancing its fair lending efforts, such as entering into a collaborative agreement with HUD, requiring Fannie Mae and Freddie Mac (the “Enterprises”) to submit Equitable Housing Finance Plans (which we previously discussed here), and issuing a fair lending policy statement and advisory bulletin. It also took steps to expand access to credit, announcing last summer that positive rental payment history can be included in Fannie Mae’s underwriting process.

According to the plan, one of the agency’s three strategic goals is to foster housing finance markets that promote equitable access to affordable and sustainable housing. Specific objectives include promoting sustainable access to mortgage credit, advancing equity in housing finance, serving as a reliable housing market information source, facilitating availability of affordable housing, and supporting leveraging of technology in mortgage processes. The strategic plan identifies a variety of means the FHFA plans to utilize in order to achieve these objectives, many of which involve monitoring and oversight of the Enterprises. For example, FHFA proposes to oversee the Enterprises’ implementation of Equitable Housing Finance plans, and conduct equity and fair lending assessments and targeted examinations on the regulated entities’ policies, products, and initiatives. FHFA would also monitor the Enterprises’ efforts to increase and preserve sustainable mortgage purchase and refinance credit for all qualified borrowers, with additional focus on low- and moderate-income families, communities of color, rural areas, and other underserved populations.

Based on the objectives in this strategic plan, it is possible we will begin to see more changes in the mortgage underwriting process, as the plan signals that FHFA will explore opportunities to leverage non-traditional data, alternative approaches, and new technology. We also can expect to see FHFA publishing more data and analysis on fair lending, fair housing, and equity topics in the future.