Fannie and Freddie, the linchpin of the nation’s MBS market, may never get out of conservatorship. Right? Actually, they might. A pending risk-based capital rule could play a role in the drama.
Industry insiders are speculating whether former FHFA Director Mark Calabria delayed the release of the 2020 stress tests results because they contradicted his proposed capital rule.
Thanks to restrictions placed on the GSEs, investment-property mortgages are flowing into non-agency MBS. Some lenders are issuing deals on their own while others are turning to aggregators like Credit Suisse.
Despite protests that existing yield maintenance protects investors from prepayment risk on agency CMBS, FHFA directed the Federal Home Loan Banks to limit their exposure.