Capital requirements

A common concern in housing finance reactions has been the lack of accommodation for strategies routinely used to manage credit, rate and liquidity exposures.

To honor Stevens, who started in the secondary market where dry mortgage notes are sold to investors, let's delve into why the B3E proposal is badly constructed.

The agency reconfirmed the new nonbank capital rule won't become effective until late next year after inadvertently publishing an update with an earlier date.

New and proposed capital rules for some depositories and nonbanks could change the roles the various institutions play.

The number of sellers it works with in the correspondent channel has grown due to pending capital requirements affecting larger depositories' interest in loans.

Regulators will now accept feedback until Jan 16, 2024 — a six-week extension — concurrent with a Federal Reserve effort to gather additional information about the potential implications of the proposed capital changes.

Not only could warehouse lines of credit be impacted by the U.S. version of international Basel rules, and financing secured by mortgage servicing rights may be, too.

MSRs already get very punitive treatment relative to other assets and regulatory reform following the banking crisis could increase it, according to some analysts.

Regulators should create a simple liquidity formula that allows the secondary market to function rather than using depository rules as a model, writes the head of Whalen Global Advisors.

Adolfo Marzol came to the agency after a stint at HUD and a 30-year career in the mortgage industry. He will depart on Dec. 18.

Fannie hasn't completed any credit risk transfers to private investors since the second quarter. Some experts worry the decision — likely spurred by the company’s concerns about a recent capital regulation — could put the mortgage giant on unsteady footing.

The Federal Housing Administration said in its annual actuarial report that the capital reserve ratio on its mutual mortgage insurance fund increased to 6.10% in fiscal year 2020, up from 4.84% a year earlier.

The Financial Stability Oversight Council said the mortgage giants may need a bigger capital cushion than their regulator has proposed, but stopped short of designating them as “systemically important financial institutions.”

The GSEs began sharing their risk with the private market in new ways during conservatorship, and the Federal Housing Finance Agency’s proposed capital framework currently discourages the use of those strategies. Industry leaders voiced concerns in a FHFA listening session this week.

The Federal Housing Finance Agency's proposal could undermine the companies’ mission to support the housing market and penalize consumers in underserved communities, industry and consumer groups say.

The much-anticipated proposal, which would not go into effect until after Fannie Mae and Freddie Mac are privatized, reflects Director Mark Calabria’s aggressive efforts to get the companies on a strong financial footing.

Director Mark Calabria, who abandoned the Fannie and Freddie capital proposal written by his predecessor, said he expects a revised framework to be ready “very soon.”

FHFA Director Mark Calabria said the health crisis will complicate the release of a proposal establishing new capital requirements for Fannie Mae and Freddie Mac.

Banks may be protected from a direct hit, but they have invested in vehicles that include such loans, potentially exposing them to defaults.

With policymakers focused on ending Fannie Mae and Freddie Mac’s conservatorship, their regulator is reorganizing key units and adding staff to position itself for the long term.