FHFA Director Mark Calabria and Treasury Secretary Steven Mnuchin seem to have different motives to take the GSEs out of conservatorship. However: Will they be able to reach an agreement soon?
Although FHFA claims to have taken steps to improve its supervisory prowess, no signs of those improvements are apparent, the agency OIG said in its semi-annual report to Congress.
If the FHFA wants to release the GSEs from conservatorship before President Trump leaves office, it will need a big assist from Treasury. And therein lies the problem.
Under the final rule, Fannie and Freddie will have to hold slightly more than $283 billion in capital. That’s $49 billion more than what FHFA had estimated when it re-proposed the rule in May.
The new rule provides clarity about how much and what kind of capital Fannie and Freddie will need in order to exit conservatorships. But the likelihood of that kind of capital raise seems remote.