Fannie Mae-No Politics (FNMA)

[bcde]

Q&A for Keynote Speaker Craig Phillips
December 2, 2019
https://housingfinancestrategies.com/235-2/

"The GSEs operate as an insurance model and not a balance sheet-funded model. Because the GSEs primarily finance themselves through asset sales, by issuing guaranteed mortgage-backed securities, unlike banks they do not have funding roll-over and interest rate management risk. It is a matter of opinion, but I believe the risk weighted capital requirement in the originally proposed rule was aligned with the capital treatment for a bank that engaged in similar activities to those of the GSEs. Numerous private sector calculations based on historic losses have validated that judgment."

Will the Calabrias's new capital rules change Mel Watt's proposed capital requirements from bank-like capital requirement to insurance-like capital requirements?

If MC comes up with insurance-like capital requirements for FnF, then this will be a big game changer in re-capitalizing FnF.