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The latest news and analysis from the NYU Furman Center.
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The Latest GSE Stress Test Results: Showcasing the Need for Regulatory Capital Revision (Part 2)
On August 11, the Federal Housing Finance Agency (FHFA), the regulator and conservator of Freddie Mac and Fannie Mae, the two government-sponsored enterprises (GSEs), released the latest annual regulatory stress test results for the two firms, based upon their yearend 2021 financial statements. This is the ninth year of the legally-mandated test, which has at its core the “severe adverse” economic scenario produced by the Federal Reserve. This second of a two-part series shows how the stress test result—i.e., a $4.5 billion loss for the two GSEs combined—is consistent with a level of required capital for the GSEs that is conservatively calculated to be in the $120-135 billion range.
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The Latest GSE Stress Test Results: Confirming a Major De-risking Success (Part 1)
On August 11, the Federal Housing Finance Agency (FHFA), the regulator and conservator of Freddie Mac and Fannie Mae, the two government-sponsored enterprises (GSEs), released the latest annual stress test results for the two firms. This is the ninth year for the GSEs to be subject to the legally-mandated test, which reflects the “severe adverse” economic scenario produced by the Federal Reserve being applied to the companies’ year-end 2021 financial statements.
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Research & Policy
When Will Government Control of Fannie Mae and Freddie Mac End? (Part 2)
Part 1 of this series described how when the GSEs were put into conservatorship under the Bush administration, the prevailing view was that fundamental reform of their operations was a necessary prerequisite to ending government control. Part 2 addresses two related issues how much longer can we expect government control to last, and what are the most important steps that can be taken in the near term to prepare the companies for an exit to happen as expeditiously as possible, once the FHFA and Treasury decide to go ahead.
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Research & Policy
When Will Government Control of Freddie Mac and Fannie Mae End? (Part 1)
Freddie Mac and Fannie Mae, the two government sponsored enterprises (GSEs) that have long funded roughly half of all single-family mortgages in America, were placed under government control on September 7, 2008, at the height of the financial crisis then underway. Under four presidential administrations, a handful of key policy decisions cumulatively extended that control far longer than anyone would have originally predicted; with its fourteenth anniversary approaching, moreover, there is arguably no end in sight. This article, the first of a two-part series, describes those decisions, as well as the background and thinking behind them.
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Research & Policy
Advancing Choice in the Housing Choice Voucher Program: Source of Income Protections and Locational Outcomes
In a new NYU Wagner Research Paper, Ingrid Gould Ellen, Katherine O’Regan, and Katharine WH Harwood used data from the U.S. Department of Housing and Urban Development (HUD) to better understand the impact of source of income (SOI) laws on locational outcomes. These laws prohibit discrimination based on the income a tenant uses to pay rent and thus make it unlawful to refuse to rent to a household on the grounds that it participates in the Section 8 Housing Choice Voucher program.
