22 04, 2024


2024-04-22T16:37:29-04:00April 22nd, 2024|2- Daily Briefing|

FHFA Sets Comment Deadline for Freddie Closed-End Loan Product

The Federal Register includes the FHFA’s comment request on a new Freddie Mac product that would
give borrowers access to their locked-up equity without a new first lien at a higher rate or a traditional homeequity second riding piggyback atop the first lien.


18 04, 2024


2024-04-18T15:29:06-04:00April 18th, 2024|5- Client Report|

Housing Takes on Immediate Political Impact, Will Action Follow?

Although there was no need for further evidence that campaign season has begun, today’s Senate Banking housing hearing surely confirmed it.  Chair Brown (D-OH) used his opening statement and virtually all of his questioning to focus on Ohio-specific issues; GOP senators argued forcefully that Biden Administration policies reduce housing supply and hike unaffordability.  Sen. Brown talked about the need for legislation in several instances, but it remains to be seen if he plans near-term action on a specific proposal.  Perhaps hoping for this, Sen. Cortez-Masto (D-NV) questioned FHFA Director Thompson about Home Loan Bank mission compliance, pressing colleagues to support a bill she introduced in the last Congress to double the System’s affordable-housing obligation and alter other aspects of their operations.  Sandra Thompson announced that FHFA this year will issue proposals to address the Banks’ mission and “streamline” AHP activities – she did not say how – as well as sharply constrain insurance-company members with a new, ongoing requirement for mortgage-finance activities.


31 01, 2024


2024-01-31T12:41:24-05:00January 31st, 2024|4- GSE Activity Report|

Would a Trump Victory Set the GSEs Free?

Common-stock investors clearly think so, but they’re a notably speculative lot and more than likely wrong.  In this report, we lay out why we think the limbo in which the GSEs have languished since 2008 is now a permanent quasi-vegetative state.


22 01, 2024


2024-01-22T16:02:39-05:00January 22nd, 2024|4- GSE Activity Report|

Securitization and Systemic Risk

A new Fed staff study uses models to conclude that government-backed mortgage securitization  exacerbates financial crises, contradicting conventional wisdom that – GSE blow-ups notwithstanding – properly-regulated GSEs create a liquid, diversified asset pool for an otherwise illiquid, risky asset class.  However, our read of the study leads us to side with conventional wisdom.


4 12, 2023


2023-12-04T16:41:17-05:00December 4th, 2023|2- Daily Briefing|

HFSC GOP to Press Regulatory-Agency Financial Innovation

Tuesday’s HFSC Digital Assets Subcommittee hearing will focus on regulatory-agency offices focused on financial innovation, a session sure to give GOP Members an opportunity to closely question the OCC’s witnesses about her agency’s hiring offer to a person heading this activity who turned out to have a fraudulent resume.

HFSC GOP Lays Out “Market-Based” Affordable Housing Approach

The HFSC majority-staff memo for Wednesday’s Housing Subcommittee hearing emphasizes GOP goals with regard to “market-based” solutions addressing affordable housing.  In this context, Fannie, Freddie, and FHA come in for criticism with regard to driving out private capital, but the memo makes no specific recommendations about how to address this or, indeed, many of the zoning, supply-chain, and other challenges it identifies.

FSB Toolkit Focuses on Critical Interdependencies

Following its initial consultation, the FSB today published its final report on enhancing third-party risk management, now laying out a flexible and nonbinding toolkit focused on incident reporting, identification of critical dependencies, interjurisdictional comparability and interoperability, and systemic risk management.  In addition to a list of terms and definitions, the report provides tools to help financial institutions and supervisors identify critical third-party services and manage their risks.


27 11, 2023


2023-11-27T11:49:59-05:00November 27th, 2023|4- GSE Activity Report|

An Advanced View of Regulatory Capital?

The most significant thing in FHFA’s final capital rule is not what is to be done, but what FHFA left out: ending the GSEs’ advanced-approach requirement.  As a result, Fannie and Freddie can still use models for key calculations, a requirement that makes more sense for two complex organizations than it did for the regional banks also long subject to advanced-approach requirements even though the rules required them, like GSIBs, to hold the higher of the standardized or advanced approach.


20 09, 2023


2023-09-20T09:32:14-04:00September 20th, 2023|4- GSE Activity Report|

It’s Not Over…

Or maybe it is, but not everyone has heard.  Earlier this week, Rep. Andrew Ogles (R-TN) introduced H. R. 5549 to require Treasury to give Congress a complete plan to end the GSEs’ conservatorship.  Our forecast:  don’t wait up.  Our observation:  it’s interesting that a conservative freshman hasn’t given up even though there’s no sign that his leadership has any interest reviving this idea.  This is far too early and far too little to suggest a leading indicator to renewed Republican interest in tackling the GSEs now that Pat Toomey is gone from the Senate, but it’s noteworthy nonetheless.


11 08, 2023


2023-08-11T16:27:33-04:00August 11th, 2023|3- This Week|

The Capital Construct Continued

Even as we stay on watch for new regional-bank resolution rules, and keep you posted on some high-impact events (see below), we’ve been plowing through hundreds of pages of regulatory-capital rewrites.  Last week, we built on our in-depth analyses of the overall capital framework (see FSM Report CAPITAL230) and the new approach to credit risk (see FSM Report CAPITAL231) with several new in-depth assessments.


10 08, 2023

FedFin on: 9th Inning Results

2023-08-11T16:25:22-04:00August 10th, 2023|The Vault|

FHFA today released the results of the ninth stress test it’s run on Fannie and Freddie since Dodd-Frank demanded this in 2010.  Using pretty much the same flawed models as the Fed, FHFA finds Fannie and Freddie pretty much as they are even under acute stress.

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

10 08, 2023


2023-08-10T16:41:31-04:00August 10th, 2023|4- GSE Activity Report|

9th Inning Results

FHFA today released the results of the ninth stress test it’s run on Fannie and Freddie since Dodd-Frank demanded this in 2010.  Using pretty much the same flawed models as the Fed, FHFA finds Fannie and Freddie pretty much as they are even under acute stress.


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