As with its concession yesterday to servicers, FHFA’s bow today to originators with loans in the pipeline is a very limited-time offer which must be read carefully before opening.  We do not think it spells the end of conventional securitization, as some has posited, but it reinforces our view that FHFA, Treasury, and the Fed want the mortgage system of the future to rely on counterparties with balance sheets to fall back on.  Yesterday, the GSEs provided a bit of liquidity and today they are on the hook for some capital; tomorrow, the mortgage system will have weeded out many players who needed far more of both.

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