Treasury Secretary Bessent’s cautious remarks about the prospect for GSE reform heighten industry skepticism about the release of Fannie Mae and Freddie Mac from conservatorship.
The Federal Housing Finance Agency in recent years has done a better job than Ginnie Mae in interagency planning for a hypothetical nonbank crisis, according to the Government Accountability Office.
Obstacles like how to deal with the implicit guarantee and excessively high capital requirements make it unlikely that the GSEs will exit conservatorship under Trump, though the chances are higher than before his election.
The debate over how to end the conservatorships of Fannie Mae and Freddie Mac hinges on whether rating services would downgrade the GSEs if they exit without an explicit government guarantee.
The settlement includes $19.4 million in disgorgement of profits the SEC said BMO generated between December 2020 and May 2023 through misleading sales of agency CMOs.
TRACE trade data on non-agency CMOs isn’t released until 18 months after the transaction, leaving customers at the mercy of dealers when it comes to pricing information.
Critics argue that, if Fannie Mae and Freddie Mac are released from conservatorship without an explicit government guarantee, MBS investors will demand wider spreads to cover the added credit risk.
DOJ sees no issues for MBS, ABS from new rule restricting foreign access to Americans’ personal data; Momnt Technologies 2023 ABS issuance facing performance issues; Redwood rebrands prime residential mortgage aggregation unit to match MBS shelf.
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