The House Financial Services Committee chairman is calling out Fannie Mae and Freddie Mac's regulator for authorizing payments to two housing trust funds while the mortgage giants have their own financial struggles.
Craig Phillips, a top aide to Treasury Secretary Steven Mnuchin, said his department "broadly" agrees with the FHFA plan, which would return Fannie Mae and Freddie Mac to the private market and provide them an explicit government guarantee.
The announcement Thursday that Treasury Secretary Steven Mnuchin and Federal Housing Finance Agency Director Mel Watt agreed to let Fannie Mae and Freddie Mac each build a $3 billion capital buffer avoided a potential crisis.
Fannie Mae and Freddie Mac will be allowed to build capital buffers to protect against losses under an agreement between the Treasury Department and the Federal Housing Finance Agency announced on Thursday.
The two government-sponsored enterprises have relied on the “classic” FICO credit scoring model for the past 12 years. But the Federal Housing Finance Agency is weighing whether the GSEs should upgrade to more recent scoring alternatives.
Testing of the common securitization platform is taking longer than expected, but the Federal Housing Finance Agency said it won't delay the 2019 launch of Fannie Mae and Freddie Mac's new single "uniform mortgage-backed security."
Federal Housing Finance Agency Director Mel Watt said the agency is poised to examine alternatives to how a Fannie Mae and Freddie Mac assess creditworthiness of home buyers, including seeking public comment on the issue later this fall.