Crazy for CRT

Now that we have FHFA’s comment deadline – November 26 – we expand our initial analysis of FHFA’s capital rewrite into a more detailed assessment of its strategic impact.  How key industry sectors view this new approach will very much depend on what each sector wants – those who want CRT got almost all they desired while those who want bank capital parity lost still more ground to Fannie and Freddie.  Assuming the final rule advances ASAP along proposed lines – and we think it will – and combined with the liberalized PSPA, CRTs will define mortgage securitization across anything close to a conventional conforming loan and all the higher-risk products the GSEs can purchase again.