The Structured Finance Association said it is concerned FHFA believes that, if the GSEs have capital levels similar to banks, the need for an explicit guarantee will be eliminated.

Nonprofit groups said the new rule will lead to higher guarantee fees, potentially pricing many low-income families and families of color out of the GSE channel.

According to the CFPB’s own estimate, as many as 957,000 loans would be affected by the expiration of the patch.

After the comment period on the re-proposed GSE capital rule closes, the FHFA will hold “listening sessions” allowing stakeholders to elaborate on their comments.

Extending the GSE patch until six months after the new QM rule goes into effect would give market participants adequate time to prepare, and minimize the number of loans impacted by the change.

The improved financial performance of the GSEs largely reflects the impact of CECL. The provisions for losses that would have been made in 2Q20 under the old accounting standard were already accounted for by CECL, which was adopted in December. (Includes data chart.)

Democratic lawmakers said the re-proposed capital rule could adversely affect access to credit for borrowers of color and lower income individuals. Also, they said quickly recapitalizing the GSEs in the midst of a public health crisis might interfere with the nation’s economic recovery.

Although the FHLBanks market themselves as local lenders, this image doesn’t match their operations. Ten of the nation’s largest commercial banks account for about 30% of FHLBank advances.

GSEs continue to wind down of their retained-mortgage portfolios.

Some industry players believe FHFA Director Mark Calabria wants to use an activities-based review of the market to reduce regulations, which many observers think increase the cost of mortgages.