The FHFA proposed a rule on Wednesday to amend the Enterprise Regulatory Capital Framework (ERCF) for the GSEs that would refine the leverage buffer and the risk-based capital treatment for CRT transactions. However, far from reopening the whole discussion on the ERCF, the new rule proposes three specific amendments based on comments the FHFA received last year.
The proposed amendments “would better reflect the risks inherent in the Enterprises’ business models and encourage the Enterprises to distribute acquired credit risk to private investors rather than to buy and hold that risk,” the FHFA’s outline states.
The amendments would:
1. details ⇒
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