The key concern among the industry is the GSEs’ reliance on loan-to-value ratios and debt-to-income ratios. They recommend Fannie and Freddie develop alternative underwriting criteria for low-income borrowers.
The plans will focus on reducing the racial and ethnic homeownership gap and helping to mitigate underinvestment and undervaluation in previously redlined neighborhoods.
A risk-based capital regime could be in the works for Fannie and Freddie, though some GSE watchers suggest the whole exercise could be in flux. Meanwhile, Wells Fargo has a new servicing chief, Ann Thorn from Caliber Home Loans.
Despite protests that existing yield maintenance protects investors from prepayment risk on agency CMBS, FHFA directed the Federal Home Loan Banks to limit their exposure.
The creation of a U.S. sovereign wealth fund could grease the skids for an end to the conservatorships of Fannie Mae and Freddie Mac.
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