Approval Must Adhere to Safety and Soundness Guardrails
Today U.S. Federal Housing, in keeping with its statutory responsibilities as conservator of Fannie Mae and Freddie Mac (the Enterprises), allowed both Enterprises to approve Rocket Companies’ proposed acquisition of Mr. Cooper Group, subject to appropriate conditions to ensure the ongoing safety and soundness of Fannie Mae and Freddie Mac.
The Agency’s safety and soundness staff conducted a rigorous analysis of the proposed merger of two of the Enterprises’ largest individual seller-servicer counterparties. Staff independently recommended that the Enterprises approve the combined entity to do business with them so long as Fannie Mae and Freddie Mac each retain strict counterparty concentration risk limits at 20% and impose other appropriate financial and operating safeguards to protect the Enterprises and the mortgage market. No market participant should have greater than 20% of Fannie or Freddie’s servicing market in order to ensure the safety and soundness of the mortgage market and the overall economy.
Today’s decision ensures the housing finance system can continue to develop and innovate while Fannie Mae and Freddie Mac are able to confidently serve as an ongoing source of liquidity to the market throughout the economic cycle.