Challenge Your Exam Readiness With Our Free NMLS Practice Questions

The Federal Housing Finance Agency (FHFA) is the regulator and supervisor of the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, as well as the Federal Home Loan Banks. FHFA oversees the safety and soundness of the GSEs, sets key capital and risk-management standards, and—since the 2008 financial crisis—has also functioned as conservator for Fannie and Freddie. This role is distinct from that of the CFPB, which focuses on consumer financial protection rules (e.g., TILA/RESPA, ECOA, HMDA). HUD administers FHA insurance and numerous housing programs but does not regulate the GSEs. The FDIC insures deposits and supervises certain banks for safety and soundness but has no chartering or supervisory authority over Fannie Mae or Freddie Mac. Understanding these roles clarifies how product eligibility, secondary-market execution, and servicing requirements are shaped by the GSEs under FHFA’s policy direction, while consumer protection rules remain within the CFPB’s remit. Therefore, Answer B is correct.