The platform is used to estimate the future performance of the loans owned or guaranteed by Fannie Mae and Freddie Mac.

The final rule sets the goal for prospective mortgage purchases at 20% of each FHLBank’s Acquired Member Assets program.

The issue presents a potential conflict in securitization transactions because lenders typically take a borrower’s word on income reporting, according to two Federal Reserve economists.

The GSEs won’t accept LIBOR-based loan applications after Sept. 15. They expect all purchases linked to the London rate to cease by yearend.

Taking a close look at the much more stringent capital norms for the GSEs, Matthew Howlett, an equities analyst at Nomura, reiterated his buy rating for Fannie Mae. The hitch? He assumes a ROE of 11.4% by 2024.

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.

Directed by its regulator to curtail non-insurance front-end risk transfer deals, Fannie is piling into CIRTs instead.

The FHFA has adopted bank-like capital standards for Fannie and Freddie, but the result won’t be bank-like returns on equity, making a public stock offering for the two entities more difficult.