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.
As funding sources dried up late in the first quarter, members sharply increased their FHLB advances. But when financial markets stabilized in the second quarter, these short-term loans weren’t replaced. (Includes two data charts.)
Models using the most likely assumptions about retained earnings, capital requirements and expected returns suggest the GSEs would have unsuccessful public offerings.
The FHFA, which serves as the regulator and conservator of the GSEs, lacks the authority to supervise Fannie’s and Freddie’s third-party cloud service providers.
After the comment period on the re-proposed GSE capital rule closes, the FHFA will hold “listening sessions” allowing stakeholders to elaborate on their comments.