Federal Reserve Vice Chair Michael Barr plans to recommend retaining capital requirements for unrealized losses on MBS held in bank portfolios. This provision was in response to the 2023 banking crisis.
The non-agency market could gain from a reduction in GSE loan limits, revision in capital requirements for banks and updated requirements for publicly registered securitizations.
If Freddie Mac is allowed to purchase second mortgages, critics argue there should be clearly articulated capital requirements, loan-to-value ratio limits and debt-to-income ratio restrictions.
A proposal from FINRA to reduce the timeframe in which trades of MBS and ABS must be reported didn’t sit well with some industry participants, prompting the SEC to take a closer look at the proposal.