The long saga of the Single Security Initiative culminates in what’s supposed to be a more liquid and efficient TBA market as Fannie and Freddie issue their first common securities over the CSP.
Mark Calabria of the FHFA: “But from a risk perspective there are some key differences between banks and non-banks that we need to address in a responsible way. Prudent, sustainable risk management is one of my top priorities.” The regulator did not elaborate much...
The FHFA director adds nonbank counterparty risk to his list of concerns. He is pushing for more competition as a solution for reform. But Realtors have concerns of their own: keeping an explicit government guarantee.
The subprime crisis of 2008 may be over but court cases tied to MBS underwriting misdeeds continue to linger. The latest action pits the FHFA against Wells Fargo for one of its acquisitions: Wachovia.
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.
All eyes are now focused on the TBA market to see if the new single security from Freddie Mac and Fannie Mae creates the expected bump in liquidity and efficiency.