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Freddie Mac is considering offering stand-alone second mortgages, potentially unlocking trillions in home equity. Concerns arise about the risk to taxpayers and the ability to sell the notes. The FHFA is silent on the matter, while the FSOC report on nonbank mortgage firms is criticized for missing the mark.
RcWhalen commented on WSJ: "The #FSOC report on nonbank mortgage firms misses the point. If a GNMA issuer fails and the business is underwater..." https://t.co/nRi6kMF45l
"A recent proposal by #FHLMC to buy single-family, closed-end second mortgages may dampen agency mortgage originations and prepayments... non-trivial share of mortgage issuance comes from cash-out refinancings, representing about 9% of total conventional originations" @markets
SO when media interview Meredith Whitney about @FreddieMac buying second liens, ask her who's gonna buy these sub notes. @JoeBiden WH wants to stick them into the GSE since they cannot be sold at a profit. Silence from Sandra @FHFA
