President Trump earlier this week unleashed his fiscal year 2020 budget on Washington, chockful of implications for Fannie Mae, Freddie Mac, the Department of Housing and Urban Development and the Consumer Financial Protection Bureau.
The Securities Industry and Financial Markets Association last week voted “by a substantial majority” to approve the uniform MBS for delivery into the crucial to-be-announced market. The announcement followed months of uncertainty about whether the influential trade group would endorse the single security.
The difference between the weighted average coupon on Fannie Mae and Freddie Mac MBS soared to an average of 10 basis points in January, with Fannie pools showing consistently higher spreads. According to a report by Wells Fargo Securities last month, the wide gap may be because Fannie is offering sweeter guarantee-fee buy-up/buy-down deals to some issuers.
Earlier this month, the Financial Stability Oversight Council proposed rule changes that would make it more difficult to designate non-banks as systemically important financial institutions. It’s unclear what the new guidance would mean for the nation’s largest nonbanks, Fannie Mae and Freddie Mac.
With Mark Calabria’s confirmation as director of the Federal Housing Finance Agency seemingly imminent and the prospect looming of some kind of administrative reform of the government-sponspored enterprises, industry groups are getting anxious.
The Federal Housing Finance Agency last week issued its final rule on the uniform MBS, the single security that Fannie Mae and Freddie Mac will package and sell. Its success, though, may depend on the much-contested definition of the rule: What are “covered programs, policies or practices”?