The MBA noted that buyouts are capital intensive and can create liquidity stress for nonbanks, which don’t have large balance sheets to hold nonperforming loans for an extended period.
Much of the decline was the result of a change in how Freddie Mac classifies loans subject to a repurchase claim for which the seller has provided a remedy.
Joshua Rosner, managing director at Graham Fisher, a consulting firm, suggested that calls for an explicit government guarantee for GSE MBS are absurd.
“For MBA, the most critical issue to address before releasing the GSEs is the establishment of an explicit federal backstop for mortgage-backed securities,” according to Bob Broeksmit, president and CEO of the Mortgage Bankers Association.
Some SWFs in other countries have extensive ownership interests in major corporations and sweep much of their profits into state coffers.
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