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Treasury Secretary Janet Yellen has designated non-bank mortgage servicers as systemically important, indicating they are too big to fail. The Financial Stability Oversight Council (FSOC) has proposed a fund that mortgage companies could access for liquidity, which may lead to taxpayers bearing the risks. Critics argue that the FSOC report on non-bank mortgage firms overlooks key issues, such as the potential failure of GNMA issuers. Additionally, there are concerns about Freddie Mac buying second liens that cannot be sold at a profit. Sandra @FHFA remains silent on this issue.
From @WSJopinion: The Financial Stability Oversight Council wants to establish a fund that mortgage companies could tap for liquidity, ultimately making taxpayers cover the risks government created https://t.co/cKTu5l5b8v https://t.co/cKTu5l5b8v
From @WSJopinion: To prevent bailouts, the Fed could simply stop blocking run-proof banks from emerging. But that would take political will, write @JohnHCochrane and Amit Seru. https://t.co/OLfMMWRAst https://t.co/OLfMMWRAst
The second great bailout. Paper and WSJ oped https://t.co/sWGvsWxfDm