September 15, 2021· (Bloomberg) -- Fannie Mae and Freddie Mac are poised to get less stringent capital requirements, with their regulator planning a revamp of tough rules approved at the end of the Trump administration.
In a Wednesday statement, the Federal Housing Finance Agency said it’s proposing amendments to the November rules that would specifically target so-called credit risk transfer securities -- assets that transfer the risk of mortgages defaulting to private investors. Under the overhaul, Fannie and Freddie would get more capital relief when issuing such securities.
“The amendments proposed today will allow the Enterprises to support the housing market throughout the economic cycle in a safe and sound manner,” Acting FHFA Director Sandra Thompson said in the statement. “The proposed requirements provide the Enterprises with the necessary incentives to support sustainable lending initiatives by transferring a significant amount of credit risk away from the taxpayers to private investors.”
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