Industry stakeholders said FHFA should find tremendous value in the CRT program as it reduces systemic risk by distributing risk across many investors and transactions.
The council said any distress that affects the secondary mortgage market activities of the GSEs “could pose a risk to financial stability if those risks are not properly mitigated.”
When questioned about the steep fee the GSEs charge to buy early forbear-ance loans, the FHFA director turned the tables on the lawmakers: Why didn’t Congress pay for it in the CARES Act?
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.
After the comment period on the re-proposed GSE capital rule closes, the FHFA will hold “listening sessions” allowing stakeholders to elaborate on their comments.
Extending the GSE patch until six months after the new QM rule goes into effect would give market participants adequate time to prepare, and minimize the number of loans impacted by the change.
The improved financial performance of the GSEs largely reflects the impact of CECL. The provisions for losses that would have been made in 2Q20 under the old accounting standard were already accounted for by CECL, which was adopted in December. (Includes data chart.)
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