#Calabria – Federal Financial Analytics

21 07, 2022

GSE-072122

Eliza Allen2023-01-04T16:01:36-05:00July 21st, 2022|4- GSE Activity Report|

Two Things

We yesterday provided a complete assessment of Sandra Thompson’s sojourn on HFSC’s griddle, noting the lack of any insights into essential issues such as conservatorship’s end or the full scope of CRT’s new beginning. More interesting to us are new battlelines on new products, including signs of renewed skirmishing over GSE self-insurance in lieu of MI. Unlike FHFA under Calabria, Fannie and Freddie appear to have a friend in one critical high places for new ventures, especially those said to be good for equitable finance.

GSE-072122.pdf…

6 01, 2022

GSE-010622

Arezou Rafikian2023-04-25T15:47:20-04:00January 6th, 2022|4- GSE Activity Report|

The Cost of Equity

As noted yesterday, FHFA followed through on its heavy hints in the 2022 GSE scorecards, mandating significant hikes in upfront fees on most high-balance mortgages and those for second homes. There is little question in our mind that these price hikes will restore portfolio-based origination channels for these loans and, to a lesser degree, also give PLS a boost. How much of the market transfers out of the GSEs will determine the extent to which remaining high-balance and second-home fee business cross-subsidizes lower-fee products aimed at more affordable, lower-income market segments. If, as FHFA seems to expect, business migrates and GSE capitalization improves, then cross-subsidization might be minimal.

GSE-010622.pdf…

14 12, 2021

Daily121421

Arezou Rafikian2023-05-23T12:27:52-04:00December 14th, 2021|2- Daily Briefing|

Thompson Takes the Prize
As we anticipated, President Biden today nominated Acting FHFA Director Sandra Thompson to a full term. We expect this appointment to be roundly praised by Democrats and community-advocacy groups. It will draw GOP fire, but likely not serious enough to deter her confirmation next year absent any new facts.

RFI in Limbo, Substantive FDIC Decisions Up in Air
Although fireworks were anticipated at today’s FDIC open meeting, Board members kept discussion regarding the merger RFI to procedure before moving into an executive session at which the matter was surely debated.

OCC Restores Prior CRA Framework Over Industry Objections
Largely as proposed, the OCC today finalized its rule rescinding its controversial 2020 CRA rewrite (see Client Report CRA28) and reverting to the prior CRA framework. The agency generally rejected industry arguments that recission is burdensome given that banks have already implemented the revised framework and expect soon to implement yet another revised interagency framework (see FSM Report CRA30).

FinCEN Slow Walks Structural AML/CFT Rewrite
As required by law earlier this year (see FSM Report AML133), FinCEN today issued an RFI seeking views on ways to enhance AML/CFT regulation. We will shortly provide clients with an in-depth analysis of this RFI, which highlights the importance of a risk-based U.S. system that adapts to emerging illicit-finance trends.

IMF Demands Tough Rules for Stablecoin, Other E-Money
A new IMF blog post calls for comprehensive standards akin to those Democrats today demanded (see …

6 12, 2021

GSE-120621

Arezou Rafikian2023-05-23T13:32:10-04:00December 6th, 2021|4- GSE Activity Report|

Another Post-Conservatorship Damoclean Sword

As we noted on Friday, Senate Banking Ranking Member Toomey asked SEC Chairman Gary Gensler a trick question about GSE obligations at the very end of a lengthy letter focused principally on cryptography. Gensler replied that, once Fannie and Freddie leave conservatorship, their status as federal instrumentalities might well end. Were the SEC to think so at the time, trillions in agency investments would be quickly liquidated to conform to regulatory, market, or sovereign investment restrictions.

GSE-120621.pdf…

30 11, 2021

GSE-113021

Arezou Rafikian2023-05-23T14:44:35-04:00November 30th, 2021|4- GSE Activity Report|

Setting the Limit

Unsurprisingly, FHFA today raised the GSEs’ conforming loan limit to about $647,000 and the high-cost limit to nearly $1 million. More surprisingly, FHFA Director Thompson accompanied this politically-sensitive announcement with a statement that her agency is “actively evaluating the limit and its relationship to affordable housing across the U.S.”

GSE-113021.pdf…

30 11, 2021

FedFin: Setting the Limit

Arezou Rafikian2023-05-23T14:44:45-04:00November 30th, 2021|The Vault|

Unsurprisingly, FHFA today raised the GSEs’ conforming loan limit to about $647,000 and the high-cost limit to nearly $1 million. More surprisingly, FHFA Director Thompson accompanied this politically-sensitive announcement with a statement that her agency is “actively evaluating the limit and its relationship to affordable housing across the U.S.”

The full report is available to subscription clients. To find out how you can sign up for the service, click here.…

12 11, 2021

GSE-111221

Arezou Rafikian2023-06-01T13:50:32-04:00November 12th, 2021|4- GSE Activity Report|

Taking Their Time On the Treasury Market

As Mark Calabria made clear earlier this year, reform of the Treasury market has direct, major impact on that for agency debt and MBS. Indeed, given ongoing Treasury-obligation issuance uncertainties at a time of brute-force fiscal policy along with continuing debt-ceiling drama, the two high-quality liquid assets are tied at the hip even if bank liquidity rules don’t recognize this. We thus review the new inter-agency Treasury-market report for its agency impact at a time of growing bond-market volatility. As our in-depth analysis of the new report makes clear, we had to look hard for near-term implications and, after doing our best, came away largely empty-handed.

GSE111221.pdf…

15 09, 2021

FedFin on: GSEs Get a New, If Familiar, Gig

Arezou Rafikian2023-08-03T14:58:42-04:00September 15th, 2021|The Vault|

As noted yesterday, Treasury and the FHFA pulled the Trump PSPA’s plug, although importantly and widely overlooked is that this is true only when it comes to near-term asset-purchase considerations. Still, with this action atop all the others redefining Fannie and Freddie since Sandra Thompson took over, the GSEs are being reconfigured into agents of Administration policy in concert with being still more critical agencies for housing finance.

The full report is available to subscription clients. To find out how you can sign up for the service, click here.…

15 09, 2021

GSE-091521

Arezou Rafikian2023-08-03T14:58:54-04:00September 15th, 2021|4- GSE Activity Report, Uncategorized|

GSEs Get a New, If Familiar, Gig

As noted yesterday, Treasury and the FHFA pulled the Trump PSPA’s plug, although importantly and widely overlooked is that this is true only when it comes to near-term asset-purchase considerations. Still, with this action atop all the others redefining Fannie and Freddie since Sandra Thompson took over, the GSEs are being reconfigured into agents of Administration policy in concert with being still more critical agencies for housing finance.

GSE-091521.pdf…