8.31.20
On Monday, August 31, PIMCO submitted a letter to the Federal Housing Finance Agency (FHFA) warning them that their enterprise capital proposal could threaten the housing finance market by forcing the sale of mortgage bonds and boosting interest rates. “Mortgage rates will increase, homeownership will likely suffer and the national mortgage rate will no longer exist,” wrote the executives in the letter. PIMCO also warned that releasing the GSEs from conservatorship without Congressional action could signal to market participants that the government is abandoning the government’s guarantee of the GSEs mortgage-backed securities.