This week, the Trump administration released their long awaited housing finance plan that will privatize Fannie Mae and Freddie Mac.

The most notable, although not unexpected recommendation is to end the GSE conservatorship subject. At the same time the administration seeks to shift risk from government to the private sector by:

  • Encouraging the growth and competitiveness of private capital
  • Ensuring Fannie and Freddie are sufficiently capitalized to withstand a downturn without need of taxpayer support
  • Removing impediments to Private Label Securitization
  • Encouraging private sector competition

Many of the recommendations require support of the Democrat controlled house. The plan would require a significant recapitalization – up to $180 Bn.

The longer-term objective is to increase the role of private capital which many argue has been displaced due to the GSE’s role in the housing market. You can check out the full 53 page report here.

Single Family Mortgage Debt by Mortgage Holder

Source: Federal Reserve, PeerIQ

Markets expect the FOMC to cut rates another 25 bps when they convene in two weeks. Fed officials are not correcting market expectations.

In fundraising news, Even Financial – a company focused on providing services for search and acquisition – raised $25MM in a Citi and MassMutual dominated round of funding. Also Happy Money, the California Fintech that creates a marketplace for credit unions and consumers, raised $70M in their Series D. Their funding was led by CMFG Ventures, a division of CUNA Mutual.

One of the more thought provoking articles making the rounds asks the question of whether Amazon or Apple can develop a “full stack” bank. Both firms have an appetite to expand into financial services. Today, Amazon is prioritizing the sale of AWS services to banks and FinTechs. Apple is partnering its way into the market (see GS/Apple card) although it has made major inroads with payments (Apple Pay product). Until one of these companies acquires Square, Paypal, or a FinTech lender that has a charter application, we’re doubtful there’s a threat anytime soon.


PeerIQ will be attending ABS East in Miami Sep 22nd to Sep 24th. Shoot us a note if you’d like to catch up.

Industry Update

Lighter Fare