In this report, we take an in-depth look at the Hensarling-Delaney discussion draft released last week in concert with FinServ hearings trying to kick start GSE reform. The bill is huge and clearly drafted with technical expertise derived from considerable work with private interests who will pick it up and move their ideas forward as future events warrant. As we discuss below, some aspects of the bill touted in Member statements are far less clear in the statutory draft. Case in point: the “bank-like” capital requirements for eligible private credit enhancers are far from it. The details of the language also point to some significant winners in the new PLS market the bill would craft, with the bill taking a very capital-markets approach to both single-family securitization backed by Ginnie and the new PLS market.
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