Allowing the mortgage giants to retain profits resolves a short-term capital shortfall, but how much capital they would need after exiting conservatorship is still the bigger question.
The ‘Unsinkable Cathy Bessant’; Thasunda Duckett’s rising star takes center stage; the challenges facing Wells Fargo chief Charles Scharf; Fannie, Freddie to retain $45B in capital; and more from this week’s most-read stories.
The GSEs will hold onto a combined $45 billion as they start the process of going private; PayPal becomes the first foreign firm to win approval to enter the country’s payments market.
The move to alter the government's preferred stock purchase agreements is the first major one under FHFA Director Mark Calabria's tenure to wind down the conservatorship of the government-sponsored enterprises.
The shareholders' claims against Fannie Mae and Freddie Mac's regulator mirror arguments in cases challenging the Consumer Financial Protection Bureau.
While no one is suggesting that the plan will help banks regain the share they've ceded to nonbanks, bankers believe that stabilizing Fannie Mae and Freddie Mac could at least help them keep what they have.
Industry groups are calling on the consumer bureau to eliminate the debt-to-income limit for “qualified mortgages” and provide a short-term extension of special treatment for Fannie- and Freddie-backed loans.
While many lenders lately managed their business expecting reduced volume, now they get to capitalize on extremely low mortgage rates. But today's benevolent conditions will not always be with the industry.
