Many trade groups denounced Freddie’s plan to buy second liens, saying key details were lacking. There are also concerns that Freddie’s effort will simply cannibalize an otherwise healthy and liquid non-agency market for second liens.
A coalition of trade groups has told FHFA that they can’t accurately compare new credit scores with old ones unless they have data going back prior to the financial crisis.
A proposal from Freddie Mac to acquire second liens prompted immediate reactions. The GSE rebuts claims that its plan represents “mission creep” or that it would interfere with the existing securitization market for closed-end seconds.
The rating service focuses on the government’s implicit guarantee and the critical role the GSEs play in housing finance and the financial sector more generally. Fannie and Freddie also have healthy earnings.
The Federal Reserve published a hypothetical economic collapse for banks to use in their annual stress test this year. The same scenario might be used by FHFA for Fannie Mae and Freddie Mac.
Fannie Mae has added three new attributes to its daily prepayment report for mortgage-backed securities. The enhancements will provide timely data on principal reductions.
The capital markets teams at Fannie and Freddie churned out a reperforming loan sale, a Guaranteed Multifamily Structures deal and a Structured Agency Credit Risk transaction.
A tangled web of climate risk, shady insurers, shoddy ratings services and lax insurance rules at the GSEs may snarl Fannie Mae and Freddie Mac in unexpected counterparty risk.
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