FHFA officers told the inspector general that they believed performing some of the required security assessments “was an inefficient use of agency resources.”
Housing-finance watchers are gearing up for December when the Supreme Court will hear oral arguments challenging the government’s net worth sweep of Fannie Mae and Freddie Mac profits.
The Structured Finance Association said it is concerned FHFA believes that, if the GSEs have capital levels similar to banks, the need for an explicit guarantee will be eliminated.
Nonprofit groups said the new rule will lead to higher guarantee fees, potentially pricing many low-income families and families of color out of the GSE channel.
The FHFA, which serves as the regulator and conservator of the GSEs, lacks the authority to supervise Fannie’s and Freddie’s third-party cloud service providers.
MBA President Bob Broeksmit argues that the new LLPA “flies in the face of the administration’s recent executive actions urging federal agencies to take all measures within their authorities to support struggling homeowners.”
Urban Institute researchers estimate the 7% fee the GSEs charge to purchase loans that have gone into forbearance after closing squeezes 255,000 creditworthy borrowers out of the market.
Democratic lawmakers said the re-proposed capital rule could adversely affect access to credit for borrowers of color and lower income individuals. Also, they said quickly recapitalizing the GSEs in the midst of a public health crisis might interfere with the nation’s economic recovery.
Some industry players believe FHFA Director Mark Calabria wants to use an activities-based review of the market to reduce regulations, which many observers think increase the cost of mortgages.
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