Much of the criticism from the GOP concerned the re-proposed capital rule for Fannie Mae and Freddie Mac, which will reduce the capital relief the GSEs receive for credit-risk transfers.

Facing pressure from both sides of the aisle, FHFA Director Mark Calabria said if the GSEs had come into the current crisis with sufficient capital, the adverse market fee could have been delayed for a few years.

Industry feedback on the re-proposed GSE capital rule underscores the need for an explicit and permanent government guarantee on Fannie’s and Freddie’s existing and future MBS.

Beginning Sept. 1, all new floating rate quotes for multifamily loans can only be indexed to SOFR, the two GSEs said.

The GSE, however, hasn’t issued any new credit-risk transfer transaction since March and has no plans to for the rest of the year. Meaning?

Bolstered by recent successful offerings, Freddie Mac has four more STACR deals on its calendar for the year, each with its own companion ACIS transaction.

The CRT market is showing signs of post-pandemic recovery. But Freddie Mac’s former CEO believes the re-proposed capital rule for the GSEs could make the whole CRT program pointless.

If the new rule had been in effect at 3Q19, CRT would have reduced the GSEs’ capital requirement by $22.1 billion. On the other hand, CRT provisions under the 2018 version would have provided $41.3 billion.

Industry experts have identified the TALF program as a vehicle the government could use to help fund nonbank mortgage servicers.

Uncertainty regarding the performance of mortgages underlying its CRT in-vestments prompted PMT to boost the discount rate on its loans from just 5% at the end of the fourth quarter to about 11% as of March 31.