Part of the problem is that the current proposed rule was a product of the previous director and much has changed since the rulemaking began a year ago.
The increase reflects a 5.38% surge in the price of the average home from the third quarter of 2018 to the third quarter of 2019, as calculated in FHFA’s House Price Index.
The FHFA director said Fannie Mae and Freddie Mac may fully exit conservatorship as early as 2022. Meanwhile, on FHLBank membership to non-banks, Calabria said the agency will soon be putting out a request for information.
The legislation appears to be a de facto extension of the qualified-mortgage patch, according to Cowen analyst Jaret Seiberg. He said the bill could be positive for housing by ensuring the supply of mortgage credit is not constrained.
Treasury claims the GSEs’ unfair advantage is because of their capital treatment. Urban Institute researchers say it’s because of the government backstop of their credit risk.
Fannie and Freddie once again posted strong earnings but the results would have been even better if not for large hedging charges. (Includes data chart.)
Based on current earnings, it will take until 4Q20 or 1Q21 for Fannie to accumulate its statutory minimum capital requirement. For Freddie, the wait will be a little longer — until the 2Q21.
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