If Congress takes up GSE reform, Mark Calabria, who served as director of the Federal Housing Finance Agency during the first Trump administration, has some suggestions.
If the GSEs comply with the Federal Housing Finance Agency’s existing capital rule, maintain strong risk-adjusted earnings and uphold a dominant market presence, a stand-alone rating in the A category could be possible for the firms.
The hedge fund billionaire predicts Treasury will write off its senior preferred shares in the GSEs and exercise its warrants for 80% of their common stock.
The MBA noted that buyouts are capital intensive and can create liquidity stress for nonbanks, which don’t have large balance sheets to hold nonperforming loans for an extended period.