The former FHFA director said, given the Federal Reserve’s commitment to fight inflation, home prices could fall by double digits in percentage terms over the next few years.
Conservative economist Douglas Holtz-Eakin said the Federal Reserve’s exit from the MBS market is helping drive up interest rates in the affordable housing space. The remedy, he said, is GSE reform.
Fannie Mae and Freddie Mac saw declines in the flow of volume in their mortgage securitization businesses during the first six months of 2022. Meanwhile, smaller lenders continued to gain some market share. (Includes two data charts.)
The new 50-basis-point upfront fee is intended to offset the cost of capital each enterprise is required to hold for guaranteeing the collateral of its competitor.
Trade groups are resigned to whatever model FHFA chooses, but they need data on how it performs compared to FICO to set up their own systems and procedures.