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Volume 17 - Number 24

December 1, 2017

As ‘Zero Capital’ Day Approaches, Senate Moves to Create a GSE Bill

In roughly 30 days, Fannie Mae and Freddie Mac will see their capital buffers fall to zero, an event that has GOP legislators working feverishly over the past several weeks to come up with housing-finance reform legislation. In short, Republicans fear that in the event of a quarterly loss by one or both GSEs next year, these massive mortgage giants might need to tap a line of credit they have with the U.S. Treasury, which would result in another “taxpayer bailout” of the two. And since Republicans are in charge of both chambers of Congress, as well as the White House, they would get blamed. At least that’s how the situation was explained to Inside The GSEs.

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Poll

With mortgage production down noticeably this year from 2017, how many lenders might disappear via M&A or failure during the next 12 months?

10% or less. It’s not that bad out there.
11% to 25%. It’s a challenging market.
25% to 40%. It’s going to be very ugly.
No opinion.

vote to see results