In a letter to Treasury Secretary Janet Yellen and Federal Housing Finance Agency Director Mark Calabria this week, ABA requested a meeting with Treasury and FHFA officials to discuss concerns about how recent changes to the Preferred Stock Purchase Agreements governing the conservatorships of Fannie Mae and Freddie Mac are affecting mortgage markets.
Among other things, the changes—which were approved in January—are aimed at limiting the risks taken by the GSEs. Specifically, they place limits on the GSEs’ ability to acquire loans secured by investment properties or second homes, or with multiple higher-risk features. They also limit the amount of loans any one lender may sell to the GSEs through the “cash window.”
ABA raised concerns that these changes will cause disruptions in mortgage production and the ability of banks to manage pipelines. The association also raised concerns that these changes—which could significantly constrain the availability of credit, especially for lower-income and other underserved borrowers—were made without input from the industry and the public, and without any accountability from elected officials.
