With policymakers focused on ending Fannie Mae and Freddie Mac’s conservatorship, their regulator is reorganizing key units and adding staff to position itself for the long term.
The regulator said the investment bank and financial services company will help in the process of strengthening Fannie Mae and Freddie Mac’s capital standing for their eventual exit from conservatorship.
The agency is sending a strong message that it won’t rush to end an exemption for Fannie Mae and Freddie Mac while also signaling longer-term changes that will affect all lenders.
Despite changes by the Federal Housing Administration, bankers remain reluctant to join the program for fear of legal liability. But that could change if it revamps servicing processes, experts say.
Federal Housing Finance Agency Director Mark Calabria discussed the possibility of having Fannie Mae and Freddie Mac operate under a consent order to allow the government-sponsored enterprises to be able to raise capital.
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.
The window to change beneficial-ownership rules or pass other measures will be narrow, but some legislative efforts from 2019 will carry over and House Democrats will resume inquiries of certain industry CEOs and Trump-appointed regulators.
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.
