Independent mortgage bankers heaved a sigh of relief after the Federal Housing Finance Agency said it will re-propose the minimum financial eligibility requirements for single-family seller/servicers.
Lawmakers questioned Federal Housing Finance Agency Director Mark Calabria on a wide range of issues, including extending the timeline, and expanding the scope, of the eviction moratorium.
The FHFA has adopted bank-like capital standards for Fannie and Freddie, but the result won’t be bank-like returns on equity, making a public stock offering for the two entities more difficult.
With combined assets worth about $6.1 trillion, Fannie Mae and Freddie Mac will need to set aside roughly $250 billion in leveraged capital in order to comply with the new rule.
The industry has once again written to Congress requesting that guarantee fees be used only as originally intended: as a critical risk management tool to protect against potential mortgage credit losses.
If Treasury converts its senior preferred shares to commons and the GSEs go for a public offering, existing shareholders will take a haircut. Valuations on the commons could dip to $1/share for Fannie and $2 for Freddie.