November 18, 2025

In 2012, the Federal Housing Finance Agency (“FHFA”) created the Suspended Counterparty Program (“SCP”) to protect Fannie Mae, Freddie Mac, and the Federal Home Loan Banks from engaging with individuals or entities involved in fraud, embezzlement, or other misconduct related to mortgage lending. The program allows the FHFA to issue suspension orders that restrict regulated entities from conducting new transactions with counterparties that present reputational or financial risk. The SCP, codified under 12 C.F.R. § 1227, continues to serve as a central compliance framework for identifying and managing counterparty exposure.

In October 2024, FHFA proposed revisions that broaden the scope of covered misconduct to include certain civil and administrative actions in addition to criminal convictions. The proposal also increases reporting obligations and grants FHFA greater discretion to determine whether alleged misconduct threatens safety or soundness. FHFA’s 2025 Management and Performance Challenges report identifies the SCP as an ongoing enforcement priority and noted 24 suspension orders issued in fiscal year 2024 as part of the agency’s continued oversight of counterparty risk.

The program’s consistent updates to the list of suspended persons and its active enforcement may emphasize the FHFA’s intent to advance accountability among lenders, servicers, and vendors. For market participants, careful counterparty screening and ongoing compliance monitoring remain critical to maintaining eligibility and preserving investor confidence under the evolving federal framework.