Time is of the essence if FHFA Director Mark Calabria wants Fannie and Freddie irrevocably out of conservatorship before a possible change in administrations in November.
In its annual report to Congress, the FHFA recommended legislation that will allow it “to examine the records, operations and facilities” of all Fannie/Freddie servicers.
Most of the concerns about the new regulation hinge on how much profit the GSEs can make under the bumped-up capital levels. Most industry observers appear to be on the side of “not enough.”
According to former Fannie Mae CFO Tim Howard, the re-proposed capital requirements are almost 40 times the average of that indicated by stress tests conducted on the GSEs last year.
The move suggests the GSEs’ public offerings — estimated by some to be worth as much as $200 billion — may take place in the midst of the worst economic crisis since the Great Depression.