Investors are pleased that FHFA has improved the capital treatment of commingled securities. The overall industry response to the proposed rule change, though, has been a resounding “meh.”
Freddie Mac saw a big fourth-quarter increase in Supers issuance that appeared to make up for lost ground earlier in the year. All three agencies posted declines in new REMIC production in the fourth quarter. (Includes two data charts.)
Would social bonds backed by single-family loans rather than multifamily loans still comport with the GSEs’ mission without impacting safety and soundness? FHFA issued a request for input on the matter.
While the GSEs are under mandates to shrink their retained portfolios, Freddie’s holdings increased in the final three months of 2022. (Includes data chart.)
Even though the upfront fee Fannie and Freddie impose on commingled securities has been sharply reduced, some industry watchers argue that it has permanently damaged the market for Supers and REMICs.
Investors appear increasingly reluctant to sell their credit-risk transfer notes back to the enterprises at the prices Fannie and Freddie are offering.
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