Last week, Mark Calabria, Director of the Federal Housing Finance Agency announced results of an interagency review of mortgage giants Fannie and Freddie and the potential dangers they pose to the mortgage market. A major outcome of the study was the unanimous support for “capital building” a position laid out the BDA’s 2019 GSE White Paper.
The review gives Treasury and the FHFA “the explicit support of the other financial regulators to both finalize the capital rule this year and advance policies that will lead to capitalization of the GSE’s.”The BDA GSE Policy Brief can be viewed here.Calabria, who has long pushed for great scrutiny of the mortgage market, applauded the announcement during an open meeting of the council.
“I commend the council for its historic acknowledgment that (Fannie and Freddie’s) activities could pose risk to financial stability,” Calabria said. “Today’s announcement is an important and necessary step to reform and protect the housing finance system so that the [companies] can continue serving the market during crises.”
The council — which is led by Treasury Secretary Steven Mnuchin — unanimously endorsed the review’s findings, outlined in a four-page statement released after markets closed for the day.
The BDA will provide updates as they become available.