The PSPA amendments announced in January limit the number of single-family loans secured by investment properties or second homes that can be bought by Fannie and Freddie, capping the acquisitions at 7% of the GSEs' total single-family acquisitions.
During the MBA Spring Conference today, FHFA Director Mark Calabria said there needs to beanother round of PSPA amendments to further capitalize Fannie and Freddie. Calabria said that "to be able to bring in the kind of capital that we needed to Fannie and Freddie for them to be able to support the mortgage market, we need to restructure the balance sheet, and that needs to be another round of PSPA, and of course all the things in the PSPA are on the table."
The PSPA amendments announced in January limit the number of single-family loans secured by investment properties or second homes that can be bought by Fannie and Freddie, capping the acquisitions at 7% of the GSEs' total single-family acquisitions.
However, the lack of clarity in the way the GSEs may have implemented the limits and the date lenders had to adjust loan deliveries caused the MBA to send a comment letter to Treasury and the FHFA in March, citingfour areas of concern.
This week, Dave Stevens, former CEO of the MBA as well as former commissioner of the FHA,expressed his concern over several of the amendments, specifically the impact on minorities given the quality thresholds imposed by FHFA.
"In some cases Calabria's actions will simply shift business from the GSEs to the other government-backed programs of FHA, VA, and USDA," Stevens writes. "In other cases, the loans will simply not be done as they will be 'out of the money' in terms of consumer appeal. And yes, an increase in private capital will help offset some of the product gaps, but that is yet to be seen in scale."
We'll be keeping a close eye on any additional PSPA amendments and how that could affect housing.
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