To reach their statutory minimum capital levels, Fannie and Freddie may only need to accrue an extra $16 billion and $14 billion respectively, based on the size of their current capital buffer plus retained second-quarter earnings.
Analyst Richard Bove thinks the new net worth sweep agreement is just a gimmick because the liquidation preference on Treasury’s preferred stock will offset any increase in the GSEs’ capital buffers.
Dealing with the risks in Fannie Mae’s and Freddie Mac’s portfolio is more complicated than simply reducing the footprint of the government-sponsored enterprises, FHFA Director Mark Calabria told IM&A.
As most observers expected, the Treasury reform plan leaves most of the important details for Congress or the Federal Housing Finance Agency to figure out.
Treasury Secretary Steven Mnuchin shed some light on how renegotiating the preferred stock purchase agreements by the Treasury and the Federal Housing Finance Agency might impact plans to recapitalize Fannie Mae and Freddie Mac.
The department has proposed implementing a “homebuyer sustainability scorecard” to measure the performance of loans to low- and moderate-income homebuyers and first-time homebuyers.
The government-sponsored enterprises’ shareholders are hoping the Fifth Circuit’s decision holding the FHFA structure unconstitutional means the so-called net worth sweep may be invalidated.
In his first report to Congress as director, Mark Calabria describes how new accounting standards, credit-risk transfers and high interest rates cut into profits at the GSEs.
RSS