During the Financial Stability Oversight Council’s (FSOC) Principals Meeting, it was announced that FSOC will begin an activities-based review of the secondary mortgage market. In December, FSOC implemented an activities-based approach for identifying and addressing potential risks to financial stability.
“I applaud Secretary Mnuchin and the Financial Stability Oversight Council for initiating an activities-based review of the secondary mortgage market,” said Director Mark Calabria. “As demonstrated by the 2008 financial crisis and again by COVID-19, Fannie Mae and Freddie Mac must be well capitalized in order to support the mortgage market during a stressed environment.”
The review will assess both the risk that activities in the secondary mortgage market pose to the stability of the financial system, and the efficacy of various risk mitigants.
See Director Calabria’s statement from December when FSOC announced its activities-based approach here.
Source: Federal Housing Finance Agency