A new rule proposed by the FHFA this week would ensure Fannie Mae and Freddie Mac “stay focused on their core mission and do not stray into business the market already serves well” after they exit conservatorship.
Industry watchers said a blue wave would stall GSEs’ recapitalization and exit from conservatorship and likely send FHFA Director Mark Calabria packing.
The MBA said a permanent, paid-for government backstop for agency mortgage-backed securities would be the ideal way to ensure a deep, liquid secondary mortgage market.
If the Financial Stability Oversight Council gets its way, GSE capital standards will be tighter than what many in the industry want. Is that a problem? Opinions vary.
Eric Kaplan of the Milken Institute said the best possible explanation for the FHFA director’s remark is he thinks the GSEs may still have some of that profit-at-any-cost mentality that got them into trouble a decade ago.
One of the key functions of the GSEs is to pool risk nationally for the benefit of underserved borrowers, and any capital framework for the enterprises has to build in this cross-subsidy, according to housing advocates.
Trade groups point out the irony of raising mortgage rates at a time when the Federal Reserve is spending more than $40 billion a month on agency securities in an attempt to lower the cost of buying or refinancing a loan.
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.
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