Rather than ending the net worth sweep outright and agreeing to write off some of its preferred shares, Treasury is essentially simply allowing Fannie Mae and Freddie Mac to continue their practice of retaining earnings.
Although a press statement on the transaction notes the number of shares and price range has yet to be determined, the S-1 filed with the SEC says the maximum offering size is $100 million.
The regulatory language — years in the making and prompted by the growing market share of nonbank servicers — addresses capital, liquidity, stress testing and risk management among other things.
Among those filing missives: the American Land Title Association, Mortgage Bankers Association, National Association of Realtors, and the Structured Finance Association.