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Suspended Counterparty Program

Open Date:
Open for comment
Deadline:
All comments are due by
Type:
Final Rule
Number:
RIN-2590-AA60
Group:
 
Fannie Mae; FHLBanks; Freddie Mac
Document Number:
2015-32183
CFR:
12 CFR 1227
CFR Description:
SUSPENDED COUNTERPARTY PROGRAM
Federal Register Publish Date:
View Document:
 
Contact Information:

FOR FURTHER INFORMATION CONTACT: Kevin Sheehan, Associate General Counsel, at (202) 649-3086 (not a toll-free number), Federal Housing Finance Agency, Eighth Floor, 400 Seventh Street SW., Washington, DC 20219. The telephone number for the Hearing Impaired is (800) 877-8339 (TDD only).

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/SupervisionRegulation/Rules/RuleDocuments/CFR-2014-title12-vol10-part1227.pdf|199.17 KB;

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SUMMARY: This final rule establishes requirements and procedures for the Federal Housing Finance Agency's (FHFA) Suspended Counterparty Program. Under the Suspended Counterparty Program, FHFA may issue suspension orders directing the regulated entities (Fannie Mae, Freddie Mac, and the eleven Federal Home Loan Banks (Banks)) to cease doing business with an individual or institution, and any affiliate thereof, for a specified period of time where such party has committed fraud or other financial misconduct involving a mortgage transaction. 

The final rule revises the interim final rule published on October 23, 2013. The final rule excludes from the types of covered transactions that would be subject to a final suspension order any transaction involving a residential mortgage loan if the loan is secured by the respondent's own personal or household residence. The final rule provides more time than the interim final regulation provided for the regulated entities to submit reports to FHFA when they become aware that any individual or institution, and any affiliate thereof, with which they do business, has committed fraud or other financial misconduct involving a mortgage transaction. The final rule also simplifies the standard for issuing suspension orders by eliminating the requirement that FHFA demonstrate that the regulated entity has done business with the individual or institution within the past three years. Finally, the final rule clarifies the method of issuing notices of proposed suspension orders with respect to affiliates.

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