Three former CEOs of the GSEs this week debated the impact of federal conservatorship, what steps must be taken to safely end the oversight and what the GSEs should look like afterwards.
If the GSEs are released from conservatorship, some participants in the agency MBS market insist the to-be-announced market, uniform MBS and Fannie/Freddie CRT activity should remain untouched.
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.
The non-agency market could gain from a reduction in GSE loan limits, revision in capital requirements for banks and updated requirements for publicly registered securitizations.
The White House responded quickly to SCOTUS’ Wednesday ruling that the FHFA director can be fired at will. Within hours, Mark Calabria was shown the door and Sandra Thompson was appointed acting chief.
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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