The FHFA 2013rnScorecard has three priorities:</p<ul class="unIndentedList"<liA target for its singlernfamily credit guarantee business of $30 billion of unpaid principal balance inrncredit risk sharing transactions in 2013 for both GSEs and a requirement of using multiple typesrnof riskrnsharing transactions to meet the target. These transactions will allowrnFHFA to evaluate the pricingrnand the potential for furtherrnexecution in scale. FHFA also expectsrnto further increasernguarantee feesrnin 2013 and risk sharing transactions should provide valuablerninformation as to how closerncurrent guarantee fee pricing isrnto where privaterncapital would be willingrnto absorb creditrnrisk.
</li<liThe GSEs have a smaller marketrnshare of the multifamily market and there are otherrnproviders of credit in thatrnmarket. While the GSE share ofrnnew originations did increase duringrnthe financial downturn, itrnreturned to a more normal position in 2012. Each GSE's multifamily businessrnhas weatheredrnthe housing crisis and generated positiverncashrnflow and each GSE takes a different approachrnto these businesses whichrnembed some type of riskrnsharing. Givenrnthat the multifamily market'srnreliance on the GSEs has returned to a more normalrnrange, FHFA is setting a target of a 10rnpercentrnreductionrnin multifamily business volumernfrom 2012 level which is expected to be achievedrnthrough some combinationrnof increased pricing,rnmore limited product offerings,rnand tighterrnoverall underwriting standards.</li</ul<ul class="unIndentedList"<liThe GSEs' retained portfoliosrnhaverndeclined steadily since 2009 asrnrequired by the PSPAs. The composition of these portfolios hasrnalso changed significantly fromrnbeing dominated by the GSEs' own mortgage-backed securitiesrn(MBS) and performing whole loans. As those securities have been paidrndown, and as the needrnto work through delinquentrnloans increased,rnthe retained portfolios have become less liquid, thus FHFArnis setting a target of selling 5rnpercent of the lessrnliquid portion. In other wordsrntheir retained portfolios excludingrnagency securities. Thisrnadded requirement to sell from the lessrnliquid portions of their retained portfolios should lead to an even faster reductionrnthan is required under the PSPAs.</li</ul

The basic premise of the Buildrngoal is that the GSEs’ outmoded proprietary infrastructures needrnto bernupdated and maintained in such a way as to providernenhanced value to the mortgage market.  Theserninfrastructures arernnot the most effective whenrnit comesrnto adapting to market changes, issuingrnsecurities that attract private capital,rnaggregating data,rnor lowering barriers tornmarketrnentry.rn Anrnupdated infrastructure should also havernbenefits beyondrnthernGSE business model; operable across many platforms, so that it can be used by any issuer, servicer, agent,rnor other party thatrndecides to participate.</p

In a white paper issued last October FHFA raised the issue of the scope ofrnthe securitization platform.  One approach is tornfocus the platform on functions thatrnare routinely repeatedrnacrossrnthe secondary mortgage market, i.e. issuing securities, providing disclosures, paying investors,rnand disseminating data,rnwhere standardization couldrnhavernclear benefits to market participants.</p

The new entity announced byrnDeMarco to develop and implement the securitization platform will be designedrnto function like a market utility, asrnopposed to rebuilding the proprietaryrninfrastructures of thernGSEs and its functions are designedrnto operate as a replacement for some of thisrnlegacy infrastructure, however,rnthe overarching goal</bis to create something ofrnvalue that couldrneither be sold or usedrnbyrnpolicy makers asrna foundationalrnelement of the mortgage marketrnof the future.</p