"Fannie Mae's AI and machine learning governance standards, effective in August, require approved mortgage companies to operate an auditable AI governance program, extending beyond basic policy requirements."
"Freddie Mac mandates that companies implement companywide controls to map, measure, and manage AI risks related to bias, security vulnerabilities, and performance, affecting various operational workflows."
"Industry attorneys warn that the new AI guidelines will significantly impact daily operations, creating new liabilities for companies that fail to adhere to the established rules."
Fannie Mae and Freddie Mac have introduced stringent AI and machine learning governance expectations for approved seller/servicers, affecting various operational areas. These standards require companies to implement comprehensive controls and maintain audit-ready documentation. The guidelines extend beyond underwriting to include vendor tools and operational workflows, creating new liabilities for non-compliance. Companies must map and manage AI risks, ensuring documented roles and responsibilities. The rules, effective from August, necessitate an inventory of all AI tools used in mortgage operations, detailing their business purpose and ownership.
Read at www.housingwire.com
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