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.”

The platform is used to estimate the future performance of the loans owned or guaranteed by Fannie Mae and Freddie Mac.

Freddie Mac believes the market for credit-risk transfers may never return to pre-COVID levels because of the potential impact of the pandemic on mortgage performance.

States with shelter-in-place orders accounted for 75% of the single-family home loans securitized by Fannie and Freddie last year, and 81% of jobless claims filed last week. (Includes data chart.)

The hiatus in the net worth sweep added $12.53 billion to the GSEs’ combined net worth over the last six months of 2019, including fourth-quarter profit of $4.27 billion at Fannie and $2.45 billion at Freddie. (Includes data chart.)

SIFMA said the Ginnie-like market structure proposed by FHFA isn’t appropriate for conventional MBS. Moreover, the plan doesn’t address the continued misalignment of MBS issued by Fannie and Freddie.

The 2019 DFAST includes a more severe recession than in 2018, with a major economic crisis in Europe causing investors to flee to U.S. markets.

Fannie warns that the loss reserves required by the new FASB standard may exceed its retained earnings in the first quarter of 2020.

“Patch” loans, cash-out refinances, investment loans and second family homes constitute more than 50% of the dollar volume of Fannie and Freddie MBS issuance.