The amendments to the SCP would require the government-sponsored entities to report to FHFA any individual or company they do business with that has committed certain forms of misconduct in the past three years, particularly those in connection with the management or ownership of real property.
Additionally, the rule would authorize FHFA to, immediately and without first issuing a proposed suspension order, suspend business between the regulated entities and counterparties where the misconduct has resulted in debarment, suspension, or limited denial of participation imposed by a federal agency.
In a news release, FHFA director Sandra Thompson said that amending the program will “help strengthen FHFA’s ability to protect its regulated entities from business risks presented by individuals or institutions who engage in misconduct. The proposed rule will strengthen FHFA’s ability to ensure the regulated entities remain safe and sound so they continue to serve as reliable sources of liquidity.”
Last month, the FHFA and five other regulatory agencies issued another rule requiring originators to adopt quality control standards for automated valuation models (AVMs) to ensure fair and accurate real estate appraisals.
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