It’s not clear why Freddie’s multifamily profits in the third quarter were more than doubled that of its sister company. Fannie’s g-fee was higher and its portfolio larger while Freddie’s MBS issuance spiked in comparison.
The industry was not expecting the FHFA to give ground on 4% Tier I capital for Fannie and Freddie. Now for the big question: What does it mean for lenders?
Andrew Bon Salle, who runs Fannie’s single-family business, will be leaving later this year. Also, several other key GSE executives are planning departures, according to former and current staff.
In a 12-page fact sheet on the announcement, the regulator notes the final rule is “similar in key respects to the proposed rule, with certain enhancements and other changes made in response to comments.”
Freddie has issued several securities backed by re-performing loans during the pandemic. However: Are these loans still protected by the FHFA’s moratorium on foreclosures?
Despite this "relief" measure, the GSE regulator has been sharply criticized by lenders because the fee is so steep: 500 basis points for first-time buyers and 700 bps for everyone else.
As Brown and Reed point out, unless Fannie and Freddie specifically require it, the parties purchasing these loans are under no obligation to provide forbearance to the borrowers.