A Modest Recalibration of GSE Pricing

Brief

A Modest Recalibration of GSE Pricing

An Analysis
April 17, 2015

Abstract

This author presents a brief analysis of the April 20, 2015 announcement by the Federal Housing Finance Agency (FHFA) to recalibrate government-sponsored enterprise (GSE) pricing. After describing the modest changes, the author concludes that with these moves and their contemporaneously announced changes to the eligibility requirements for mortgage insurers, the FHFA has managed to both better price their risk and pave the way for a more stable mortgage insurance industry, all without significantly impacting either the GSEs’ bottom line or the cost to the consumer.

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