#MBS – Page 3 – Federal Financial Analytics

19 08, 2022

FedFin: The Social-Impact Say-So

Arezou Rafikian2023-01-04T11:19:39-05:00August 19th, 2022|The Vault|

We look here at an interesting idea from three senior Fannie Mae officials: an index to measure a Single-Family MBS’s social impact. The proposal seeks to enable socially conscious investors to support affordable housing for underserved communities while balancing the needs of mortgage borrowers, investors, and market function. It also reflects the objectives laid out in Fannie Mae’s Equitable Housing Finance Plan such as providing social impact data and boosting low-income and minority homeownership. …

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

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15 07, 2022

Al071822

Eliza Allen2023-01-06T14:59:56-05:00July 15th, 2022|3- This Week|

Home in the OK Corral

On Wednesday, FHFA Director Thompson will come before HFSC for what will be an important discussion of housing policy under the newly-confirmed director if Members of Congress allow policy substance to supersede political battles over who is responsible for inflation for which dastardly reason. In hopes of substance, we’ll monitor the hearing and provide you quickly with an in-depth analysis.

Al071822.pdf…

27 06, 2022

GSE-062722

Eliza Allen2023-01-25T15:11:54-05:00June 27th, 2022|4- GSE Activity Report|

That Was Close!

A new Fed paper analyzes the striking differences between mortgage-market liquidity – or the dramatic lack thereof – in the great financial crisis of 2008 and the pandemic crisis of March, 2020. Providing often unique insights into market strain over the last two weeks of that month, the paper concludes that market resilience in this last near systemic cataclysm was due to better underwriting ahead of the 2020 collapse and – more significantly – far larger and faster federal interventions that quickly stabilized the agency market.

There was significant stress in mortgage banks exposed to TBA-hedge margin calls and among mREITs, with these strains only made manageable thanks to the Fed’s overall market support and the small size of the non-agency market in 2020 versus 2008. The paper draws no conclusions about the next stress scenario, but its clear inference is that bailout is going to be the necessary order of the day absent more liquidity resilience at nonbank companies and mREITs.

GSE-062722.pdf…

17 05, 2022

FedFin on: CRA Regulatory Rewrite

Arezou Rafikian2023-02-21T14:50:17-05:00May 17th, 2022|The Vault|

Following much talk about the need to update Community Reinvestment Act (CRA) rules since this was last done in 1995, federal banking agencies have finally agreed on a proposed redesign of standards essential to banks that wish to expand or acquire as well as those seeking strong community ties and the policy and political benefit these afford. Much of the complexity in the NPR results from the agencies’ decision to allow only partial credit for activities (e.g., mortgages) largely assumed in the past…

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

17 05, 2022

CRA32

Arezou Rafikian2023-02-21T14:50:04-05:00May 17th, 2022|1- Financial Services Management|

CRA Regulatory Reform

Following much talk about the need to update Community Reinvestment Act (CRA) rules since this was last done in 1995, federal banking agencies have finally agreed on a proposed redesign of standards essential to banks that wish to expand or acquire as well as those seeking strong community ties and the policy and political benefit these afford. Much of the complexity in the NPR results from the agencies’ decision to allow only partial credit for activities (e.g., mortgages) largely assumed in the past to benefit low-and-moderate income (LMI) households if they occurred in LMI census tracts as well as to condition product approval on the extent to which LMI-household needs are demonstrably met. Offsetting these restrictions to some extent are broader criteria for eligible community-development and -service activities, but only wholesale and limited-purpose banks will enjoy the full benefit because new weightings require regulators to give the most weight to retail finance at most large banks.

CRA32.pdf…

16 05, 2022

FedFin: Minimizing Mortgages, Maximizing Community Service

Arezou Rafikian2023-02-21T15:06:30-05:00May 16th, 2022|The Vault|

As we noted last week, the federal banking agencies sighed a mighty sigh and heaved up a massive inter-agency proposal rewriting decades-old standards detailing which activities earn the Community Reinvestment Act (CRA) points essential for any bank’s strategic objectives and national reputation. As discussed below, the new proposal is lengthy, complex, and in some cases analytically daunting or flat-out confusing. Still one critical conclusion is clear…

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

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15 12, 2021

GSE-121521

Arezou Rafikian2023-05-23T12:20:18-04:00December 15th, 2021|4- GSE Activity Report|

The Quiescent QRM

Although there were signs earlier this year that the QRM risk-retention exemption might get a long-delayed overhaul, the agencies yesterday ducked any decisions. Thus, the QM=QRM construct continues unchanged except to the extent the QM gets narrower, the GSEs leave conservatorship, or other externalities affect what equals what for purposes of absolving MBS issuers from costly risk retention.

GSE-121521.pdf…

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…

3 12, 2021

Daily120321

Arezou Rafikian2023-05-23T13:51:13-04:00December 3rd, 2021|2- Daily Briefing|

OCC Presages Additional Climate-Risk Guidance
Although it intends to issue climate-risk guidance for big banks by year-end, the OCC today also solicited academic papers and policy research on climate risk in banking and finance for a June 2022 meeting. The scope of the inquiry suggests that the agency is exploring an array of matters well beyond its near-term guidance that may well cover all federal charters, but timing also suggests that these more sweeping requirements will be considered in the second half of 2022. Submissions are specifically requested on physical and transition risks, climate’s impact on different communities, climate risk modeling and stress testing, and ESG ratings and regulatory reliance; these are due March 11.

Gensler Expands on Crypto Risk, GSE Status
Although Senate Banking Ranking Member Toomey (R-PA) thought his answers inadequate, SEC Chairman Gensler’s response to a series of questions sheds light on the SEC’s continuing plans to cast a wide regulatory and enforcement net over cryptography.

Daily120321.pdf…