needlessly punitive given their underwriting track record and historic realized losses.
The only reason to shift away from the current structures is to pay a 3rd party too much for the insurance on the lowest part of the capital structure in each securitization. Basically privatized CRTs, which we already know are terrible products for the issuer and the FHFA is mandating them for a no good reason.
My thoughts on the reasons? So they can obfuscate their true purpose, which is to make the GSE equity (either the private shareholders or taxpayers) get less and thereby further exacerbate the failed biz model BS. Or maybe so they can give away money to the bookrunners and investors... who, shockingly enough, happen to be the biggest banks and insurance companies who stand to directly benefit from a deal (securitization) level guarantee because they already do that away from the resi and CRE spaces on more esoteric structured products. IE equipment leases and aviation securitization deals.
feel free to disagree but that's based on Howard's view of the situation as well. If you disagree that's fine, but if you do so without having read his book on the subject. People will likely find your views suspect. If you have a better, public, voice on the subject feel free to put them forth, but I've been in this industry a decade and have looked. Maybe I'm missing someone but I very much doubt it.
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