2024 Supervisors Symposium

Republican Led FHFA Priorities • FHLB Banks breath a sign of relief…no longer the center of attention • Expect FHFA to Use the Infrastructure Calabria built to pursue exit • Capital rules completed; GSEs have built $150 billion in net worth • Focus on “plumbing”—common securitization, rules with Fed/banking agencies for bank investments in GSEs, SEC… • Work with Treasury and investment bankers on pricing, ROE, and capital stack restructuring (Treasury and preferred investors) • Structuring the MBS Guaranty WILL BE EXTREMELY IMPORTANT!!! • FHFA needs Treasury on Board with all parts of the Exit Plan..Bessent’s appetite to take on the ”mortgage ecosystem” will be the most important factor in whether GSEs exit. • For a good explanation of GSE Exit challenges—Chris Whalen on HousingWire

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FSOC Report on Mortgage Servicers • Yellen-led FSOC placed servicers under the designation microscope • Nonbank mortgage servicers are 7 of the 10 largest servicers for Fannie Mae, Freddie Mac, and Ginnie Mae • Identifies vulnerabilities that can impair servicers’ ability to carry out critical functions • Failure could amplify shocks to the mortgage market and pose risks to financial stability • Large servicing portfolios cannot be transferred quickly because the transfer process is inherently resource-intensive and complicated. • Combination of various state requirements and limited federal authorities to impose additional requirements do not adequately and holistically address the risks described in the Council’s report.

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