Although anticipated, Ginnie’s announcement yesterday creating a version 1 (V1) stress test for nonbanks will surely be viewed with considerable alarm by nonbanks, with delight by any bank interested in renewed FHA or VA lending, and competitive interest by Fannie and Freddie.  Although modelled on CCAR, V1 is structurally different in many respects with considerable market and nonbank franchise-value impact.  However, although Ginnie has launched V1, it hasn’t designed a target:  the announcement leaves unsaid what Ginnie would do were a nonbank to fail the test as many may well fear they will.

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