Risk

Ginnie Mae has constructed a perfectly counter-cyclical capital regime that would crush the government loan market if left unaltered, the chair of Whalen Global Advisors writes.

A larger share of cash-out loans and slowing home-price growth is leading to expectations of more serious delinquencies down the road, according to Milliman.

The agency acknowledged that loan performance in the sector has been strong, but cited several reasons to think that might change, including rising interest rates, the effects of inflation and uncertainty about the future of work and commerce.

Fed Chairman Jerome Powell brushed off concerns that rapidly tightening monetary policy could disrupt the financial system. Some economists and policy experts beg to differ, raising concerns about loan defaults or even the collapse of a key institution or counterparty.

The two megabanks said that their capital requirements will rise in the wake of Federal Reserve stress tests, putting downward pressure on their distributions to shareholders. Meanwhile, Bank of America, Wells Fargo, Goldman Sachs and others announced plans to raise their dividends.

While the appeal of homeownership and larger spaces led property values in many fire-prone regions to surge to new records, those areas are also seeing more frequent price drops, Redfin says.

The Federal Housing Finance Agency has indicated that lenders will be required to demonstrate policies addressing the risk on business.

In its semiannual supervision and regulation report, the central bank cited strong balance sheets and liquidity but found risks for smaller banks.

The government-sponsored enterprise on Tuesday priced its fifth Connecticut Avenue Securities transaction this year, making further progress in supporting the market it left during the Trump era.

The government-sponsored enterprise has already done twice as many of these deals as it did during all of 2021.