Freddie Mac · OTC:FMCC
Freddie Mac — Investor Day (April 2023)
10 slides from Freddie Mac's investor day presentation, Apr 20, 2023
Slide 1: Seller/Servicer Risk Management
Seller/Servicer Risk Management Public Prepared by Freddie Mac © Freddie Mac
Slide 2: Today's Speakers
Today’s Speakers Keith Jones Vice President, Credit Policy, Client Credit Risk Management & Quality Control Keith Jones is responsible for Seller/Servicer applications and annual recertifications, as well as holistic oversight of Seller/Servicer risk management activities for the Single-Family busin
Slide 3: Our Agenda
Our Agenda 1. Risk Management Life Cycle Overview 2. Seller/Servicers Oversight 3. Update to FHFA Financial Requirements Public Document Title & Date Goes Here Prepared by Freddie Mac © Freddie Mac
Slide 4: Risk Management Life Cycle Overview
Risk Management Life Cycle Overview Third Party Lifecycle Third-Party Risk Management as outlined in FHFA Advisory Bulletins: risk assessment, due diligence, contracting, monitoring, issue Risk Assessment/Measurement/Planning – management and renewal/termination. Manage significant changes in third
Slide 5: Components of Seller/Servicer Oversight
Components of Seller/Servicer Oversight Financial Risk, Credit Risk and Ops Risk are weighted and combined to create comprehensive risk rating. • The Comprehensive Risk Rating comprises of Financial Risk Score Financial, Credit and Ops risk: • Financial Risk Score – Freddie Mac financial risk rating
Slide 6: Update to FHFA Financial Requirements
Update to FHFA Financial Requirements • The FHFA and Ginnie Mae jointly announced updated minimum financial eligibility requirements for Enterprise Seller/Servicers and Ginnie Mae Issuers that will be phased in starting September 30, 2023. • The core changes to the current FHFA requirements are rela
Slide 7: Update to FHFA Financial Requirements cont.
Update to FHFA Financial Requirements cont. Net Worth Requirement Current Eligibility 2.0 (Applies to non-bank and banks) Base: $2.5 million + Enterprise Servicing and All other Servicing 25 bps 25 bps Ginnie Mae Servicing 25 bps 35 bps Capital less Goodwill and Intangibles, Capital less Goodwill an
Slide 8: Counterparty Credit Risk Management (Counterparty Level Lifecycle)
Counterparty Credit Risk Management (Counterparty Level Lifecyle) Evaluation: Assessment of counterparty financial strength • Annual Review • Risk Rating • Risk Appetite Reporting Evaluation Surveillance & Monitoring: On-going monitoring of risk profile • Market Indicators • Stress Testing (Capital
Slide 9: Questions?
Questions? Public Prepared by Freddie Mac © Freddie Mac
Slide 10: Thank You
Thank You Public Prepared by Freddie Mac © Freddie Mac