Anti-Fraud Measure for Fannie Mae, Freddie Mac & Federal Home Loan Banks

The Federal Housing Finance Agency (FHFA) has announced an initiative called the Suspended Counterparty Program that will require the mortgage giants Fannie Mae, Freddie Mac and the Federal Home Loan Banks to notify FHFA whenever an individual or company have a history of fraudulent conduct. Any information of fraud or financial conduct committed by that certain individual or company reported by other government sources will also be considered.

Once an individual or a company is proved to have a history of fraudulent activity, FHFA will determine if the party should be suspended from engaging with GSEs or FHFL Banks.

However, affected parties will have an opportunity to explain why they should be able to continue conducting business with one of the FHFA regulated companies.

The initiative will take effect on August 15, 2012.