Trump’s nominee to head FHFA didn’t do anything to embarrass himself at his confirmation hearing this week, but he also didn’t demonstrate a deep understanding of housing finance.
Treasury Secretary Bessent’s cautious remarks about the prospect for GSE reform heighten industry skepticism about the release of Fannie Mae and Freddie Mac from conservatorship.
Obstacles like how to deal with the implicit guarantee and excessively high capital requirements make it unlikely that the GSEs will exit conservatorship under Trump, though the chances are higher than before his election.
The debate over how to end the conservatorships of Fannie Mae and Freddie Mac hinges on whether rating services would downgrade the GSEs if they exit without an explicit government guarantee.
Critics argue that, if Fannie Mae and Freddie Mac are released from conservatorship without an explicit government guarantee, MBS investors will demand wider spreads to cover the added credit risk.
A panel of mortgage industry veterans concluded that the best scenario MBS investors can hope for in the upcoming election is that neither side wins a clean sweep of the presidency and Congress.
A new Urban Institute paper called on policymakers to build on the Financial Stability Oversight Council’s recommendations to address liquidity vulnerabilities among nonbank Ginnie Mae issuers.
A district court judge threw out parts of a lawsuit against Ginnie Mae for canceling Texas Capital Bank’s first-priority lien on a loan portfolio of Reverse Mortgage Funding but allowed a key challenge to go ahead.
The Federal Reserve’s push to run MBS off of its balance sheet may cause interest rates to stay high even after quantitative tightening measures cease.
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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