FHFA to hold listening sessions on capital plan feedback

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The Federal Housing Finance Agency is accepting online registrations for two events at which speakers can elaborate on their comment letters about the agency's reproposed capital rule.

Following its deadline for written comments last month, the FHFA's September events will focus on two key themes emerging in responses.

Credit risk transfers will be discussed in the first session, which starts at 10 a.m. and ends at 4 p.m. on Sept. 10. Affordable housing access will be the theme of the second session, which will run from 10 a.m. to 4 p.m. on Sept. 14.

CRTs became a key vehicle for Fannie Mae and Freddie Mac's risk-sharing with the private sector early on in the GSEs’ conservatorship. The new, steeper capital requirements are intended to address the risk the GSEs retain in transactions, and will make CRTs less attractive to use.

The volatility that followed the early days of the coronavirus outbreak in the United States highlighted the fact that the structured CRT market is subject to disruption, although it has since gotten back on track.

There is also concern that increased capital requirements under the reproposed rule could also lead to higher costs for mortgage borrowers, making housing less affordable.

Rolling out the capital rule has been a balancing act for the FHFA, as it strives to ensure that Fannie Mae and Freddie Mac are strong enough to exit conservatorship without placing undue burdens on them that could undermine their mission to provide liquidity and stability to the housing market.

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FHFA GSE reform GSEs Credit risk transfers Affordable housing Capital markets