Economy

The Federal Reserve warned of significant risks of business bankruptcies and steep drops in commercial real estate prices in a report published on Friday.

While its net income declined annually for the second consecutive year, CEO Hugh Frater touted Fannie Mae’s resiliency in a record year for providing mortgage liquidity.

Meanwhile at Essent, more loans exited the inventory in January than in December.

The startup firm, backed by hedge fund capital, is pooling more than half of its managed railcar portfolio for the single-A rated transaction.

The Financial Stability Oversight Council could determine that a broad range of mortgage companies should be subject to “heightened prudential standards,” said Andrew Olmem, a partner at Mayer Brown and a former senior economic adviser to the White House.

The Biden administration could encourage the FHFA to increase the caps or restore exclusions for certain types of loans, which would boost overall volumes.

In a request for information, the agency sought feedback on how it should prioritize climate risks as part of its supervision of Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

Deals, trends and research in structured finance and asset-backed securities for the week of Jan.7-14

The FHFA and Treasury will allow Fannie Mae and Freddie Mac to hold more capital as part of the Trump administration's plans to release the companies from conservatorship. But it is unclear whether the incoming Biden administration will keep the mortgage giants on the same reform path.

A slower-than-expected rollout of the COVID-19 vaccines and the threat of social unrest after the Jan. 6 riot at the U.S. Capitol could threaten the recovery, according to an American Bankers Association panel.