Fannie hasn't completed any credit risk transfers to private investors since the second quarter. Some experts worry the decision — likely spurred by the company’s concerns about a recent capital regulation — could put the mortgage giant on unsteady footing.
FSOC’s statement on the FHFA’s proposed capital rule raises questions for market participants trying to anticipate a post-conservatorship secondary mortgage market, should the incoming administration go through with the GSEs’ exit from governmental control.
The FHFA’s attempt to move some of its balance sheet into the private sector could leave investors with greater liabilities than they were initially told.
A risk-based capital rule for Fannie Mae and Freddie Mac is expected to top the agenda in 2020 as the companies’ regulator executes plans for their release into the private sector.
Director Mark Calabria urged lawmakers to grant the agency chartering authority similar to that of bank regulators to boost competition in the mortgage market.
When the mortgage giant will be released from government control is anyone's guess, but the company's third-quarter report shows signs of an easier transition.
A Fannie Mae test to handle the private mortgage insurance process for lenders may raise concerns that it's going outside the scope of its secondary market mission. But the effort reflects its mandate to explore new credit-risk transfer alternatives, a company executive said.
Fannie Mae's first-quarter profits were enough for it to rebuild its minimum capital buffer and pay the Treasury Department dividend after being forced to take a draw during the previous fiscal period.
If Freddie Mac's credit-risk transfer activities continue to grow, mortgage lenders could eventually see a reduction in the guarantee fees they pay to the government-sponsored enterprise, according to CEO Donald Layton.
