U.S. housing finance regulator unveils new capital framework for Fannie, Freddie

  • 📰 Reuters
  • ⏱ Reading Time:
  • 48 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 23%
  • Publisher: 97%

South Africa News News

South Africa South Africa Latest News,South Africa South Africa Headlines

The U.S. regulator charged with overseeing housing giants Fannie Mae and Freddie Mac unveiled Thursday a proposed rewrite of rules boosting how much capital the pair must hold to weather a downturn.

The re-proposed rule from the Federal Housing Finance Agency would establish a bank-like capital regime for the two and require them to establish capital cushions worth hundreds of billions of dollars. The goal would be to ensure they would be able to continue to provide a backstop for the mortgage market in a housing downturn, and eventually be freed from a 12-year government bailout.

“More capital means a stronger foundation on which to weather crises. The time to act is now,” said FHFA Director Mark Calabria in a statement. The new proposal is the FHFA’s second attempt at creating a new capital plan, building on a previous proposal put out in 2018 under prior leadership. The new plan would establish higher capital requirements for the two - if the proposal had been in effect in 2019, the pair would have had a cushion of roughly $243 billion, the FHFA said.

But the proposal also attempts to make the cushion more risk-sensitive, with an eye towards ensuring capital and liquidity buffers could be used by Fannie and Freddie in an economic downturn to continue guaranteeing mortgages and keeping home loans affordable. The new proposal is open to public comment, and the FHFA would like to finalize it by the end of 2020 so Fannie and Freddie could look to raise outside capital sometime in 2021, agency officials said.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 2. in ZA

South Africa South Africa Latest News, South Africa South Africa Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Trump refusing to unveil Obama's portrait at the White House - Business InsiderBusiness Insider is a fast-growing business site with deep financial, media, tech, and other industry verticals. Launched in 2007, the site is now the largest business news site on the web. Good. Obama is a loathsome criminal. Let Melania do it. Every day, She must secretly long to see an actual man instead of a fat androgynous blob.
Source: BusinessInsider - 🏆 729. / 51 Read more »