Brief FHFA's Capital Rule Is a Step Backward
Jim Parrott, Bob Ryan, Mark M. Zandi
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In this brief, the authors summarize and critique the FHFA’s recent capital proposal for Fannie Mae and Freddie Mac, concluding that it misapplies the bank capital regime in a way that would ultimately take the GSEs and the housing finance system in the wrong direction, unnecessarily leading to higher mortgage rates, riskier GSEs, and a less stable housing finance system.

Research Areas Housing finance
Tags Housing and the economy Agency securitization Credit availability Housing finance reform Homeownership
Policy Centers Housing Finance Policy Center