Economy

The Federal Housing Finance Agency is suspending its ongoing review of new credit scoring models and will instead move forward with creating a regulatory framework for providers of alternative credit scores to apply and be evaluated for use by Fannie Mae and Freddie Mac.

The federal bank regulators are considering roughly a dozen new rulemakings in response to the bill rolling back certain sections of Dodd-Frank.

A federal appeals court in Texas agreed with Fannie Mae and Freddie Mac shareholders that the FHFA, led by a single director, violates the separation of powers.

Unusually for a debut transaction, the $329.7 million M360 2018-CRE1 will be actively managed: For the first 12 months after the closing date, funds from repaid principal can be used to purchase new loans, subject to eligibility criteria.

The collateral includes both QM and non-QM loans; however, certain loans are designated as QM even though the borrower’s DTI may be above 43%, due to a temporary exemption for GSE-eligible loans.

Fannie Mae and Freddie Mac may need to tap into U.S. Treasury funds when they adopt CECL, a new accounting rule that makes companies set aside money upfront for expected loan losses.

The $109.3 million CLEAN 2018-1 is also the first deal to be marketed as a Rule 144A transaction under securities regulation making it available to wide base of institutional investors.

A Fannie Mae test to handle the private mortgage insurance process for lenders may raise concerns that it's going outside the scope of its secondary market mission. But the effort reflects its mandate to explore new credit-risk transfer alternatives, a company executive said.

Online lenders and other firms await news from OCC and Treasury on the future of their supervision, even as they absorb the news that Square had to temporarily pull its industry loan company application.

Fannie Mae and Freddie Mac enjoy considerable advantages because of their lower cost of capital and significant government subsidies. But with some conforming loans, the private market is finding a way to compete.