FHFA Director Mel Watt warned Thursday that to prevent a potential draw on the Treasury Department by the government-sponsored enterprises, he is willing to act unilaterally to rebuild capital at Fannie and Freddie.
Rising interest rates have slowed a recent run of unexpectedly high prepayments of government-insured mortgages, making servicing rights for loans held in Ginnie Mae securities more attractive to investors.
Donald Trump was sworn in Friday, but banking industry executives have spent the last two months envisioning a vastly different political, economic and regulatory climate. The dominant question in coming months will be how realistic those expectations are.
In a candid, in-depth exit interview, Ted Tozer discusses Ginnie Mae's growth during his seven years at the agency's helm, the need for comprehensive housing finance reform, big banks' retreat from mortgages, counterparty risk management and more.
Rising interest rates typically cause lenders to relax underwriting guidelines. The incoming administration promises to deregulate. Sounds like a combustible mix, but there's ample room to loosen credit without returning to the practices that caused the crisis.