Rep. Blaine Luetkemeyer (R-Mo.) today wrote to Federal Housing Finance Agency Acting Director Joseph Otting today requesting information on how the Financial Accounting Standards Board’s current expected credit loss standard will affect Fannie Mae and Freddie Mac.
Specifically, Luetkemeyer asked how much the GSEs will be forced to add to their capital reserves under CECL, where they will find the additional capital, and whether holding additional reserves would affect the GSEs’ affordable housing goals and mortgage costs.
“With over $5 trillion in mortgage backed securities and the federal government investing in or insuring over 90 percent of mortgages in the United States, understanding the effects CECL will have on the GSEs is vital,” Luetkemeyer said. “As a key aspect of the economy and housing market, the effects of CECL on the GSEs must be fully understood before its implementation.