The FHFA announced the Suspended Counterparty Program, an initiative to complement current fraud reporting by Fannie Mae, Freddie Mac, and the FHL Banks. The Suspended Counterparty Program will require Fannie Mae, Freddie Mac and the FHL Banks to notify FHFA whenever a party with whom they do business is adjudicated to have engaged in fraud or other financial misconduct. The FHFA will determine whether a party should be suspended from doing business with regulated entities as a threat to their safe and sound operations and affected parties will have an opportunity to show cause why they should not be suspended. In appropriate cases, the FHFA will issue orders directing the regulated entities to stop doing business with the party based on a history of fraud. The Suspended Counterparty Program becomes effective August 15, 2012.
Alert June 26, 2012