Fannie Mae and Freddie Mac are way too undercapitalized, and lending standards have actually deteriorated since the housing crash, Trump administration officials say
Fannie Mae and Freddie Mac are way too undercapitalized, and lending standards have actually deteriorated since the housing crash, the officials said.
The hearing kicked off what promises to be a highly contentious debate over the plans released last week by the Departments of Treasury and Housing and Urban Development to scale back the federal government’s massive role in the mortgage market. Republicans are focusing on what they say are growing risks in the system, while Democrats are mostly concerned about providing affordable housing.
“I will tell you as a safety-and-soundness regulator, when I look at a $3 trillion institution that is leveraged 1,000 to 1, it keeps me up at night,” Federal Housing Finance Agency Director Mark Calabria, the companies’ regulator, told the committee.
What’s more, Fannie and Freddie are less equipped for a downturn now than they were before the crisis, Senate Banking Chairman Mike Crapo (R-Idaho) said. Before 2008, he said, the companies held 45 cents in capital for every $100 in mortgages; today that figure is 19 cents.
“Before we raised public capital, we would make sure we understood that there was enough capital so that they did not need to be designated” as "systemically important" by FSOC, Mnuchin said.
As it stands, underwriting standards at Fannie and Freddie have “gotten worse, not better,” Calabria said, pointing to a “massive expansion” of loans with high debt-to-income ratios in recent years.
Efforts to reduce risk, though, would inevitably result in fewer people getting mortgages — a point Democrats on the committee made repeatedly.Read more: POLITICO
What? 😂 Fannie & Freddie are the only working profitable parts of US Govt🇺🇸. Someone move the GOP away from this one & Be quick! They’ve no conceivable notion of how any of it works & they’ll guck it up badly lol RepublicansForFiscalResponsibility **This isn’t your dad’s GOP Way to manipulate the market
This is where it all started a dozen years ago. Govt. backed players in the 2ndary mtge mkt allowed to grow far beyond their charters. Couldn't make bad loans fast enough, bought bundles from others, all to meet quotas set by politicians. Churning out AAA securities that aren't. That’s tedcruz in a year. Maybe less.
Omg! Blame Republicans. And then the trap doors open. Mayhem again...
Controversial Trump aide John Bolton exits WH knocking TrumpPresident Trump has fired controversial National Security Advisor John Bolton on Twitter, after they ‘strongly disagreed.’ Sparking more controversary, Bolton offered a different recount, saying he previously ‘offered to resign.’ Former Obama official Richard Stengel argues ‘the problem with replacing Bolton’ is ‘when someone leaves the Trump administration, they’re never replaced by a better actor.’ stengel Ummm, you got shitty windows MSNBC. honestelaine stengel He WILL be replaced by someone who is not. stengel MSNBC sucks BERNIE SANDERS 2020
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After Trump Calls Off Talks, Afghanistan Braces for ViolencePresident Trump’s decision to break off peace talks with the Taliban, at least for now, left Afghanistan bracing for a bloody prelude to national elections this month Taliban reforming...They'll be releasing a new Album and touring the USA...Tickets on Ebay.