The FHFA director said Fannie Mae and Freddie Mac may fully exit conservatorship as early as 2022. Meanwhile, on FHLBank membership to non-banks, Calabria said the agency will soon be putting out a request for information.
The legislation appears to be a de facto extension of the qualified-mortgage patch, according to Cowen analyst Jaret Seiberg. He said the bill could be positive for housing by ensuring the supply of mortgage credit is not constrained.
The transaction is structured so that Fannie retains the first 40 basis points of losses. Once the $42 million retention layer is exhausted, re-insurance will cover the next 375 bps of losses.
Treasury claims the GSEs’ unfair advantage is because of their capital treatment. Urban Institute researchers say it’s because of the government backstop of their credit risk.
Over the last decade, the U.S. has averaged nearly 56,000 wildfires a year, covering more than 6.5 million acres, and destroying thousands of homes. The problem is acute enough that discussions are underway to create a reinsurance market for wildfire damage.
A District Court judge ordered the Treasury Department to produce all documents attached to subpoenas. He also asked the Treasury to produce a log of any documents withheld based on an assertion of privilege.
Hinting at the possibility of allowing nonbanks to become members of the FHLBank system, FHFA Director Mark Calabria said the agency could engage in rulemaking by mid next year.
FHFA Director Mark Calabria said to exit conservatorship Fannie Mae and Freddie Mac will have to be adequately capitalized and make appropriate changes to their culture.