February 15, 2019 | Issue 271
SFIG Meets with Regulators on Volcker Rule          

On Tuesday, February 12, SFIG members and staff met with regulators at the Federal Reserve Board of Governors, the SEC, the OCC and the FDIC to discuss specifics of the recent Volcker Rule re-proposal. The key topics of discussion were SFIG’s recommended revisions to the loan securitization exclusion and the definition of “ownership interest,” changes that would allow these provisions to work in practice for most customary securitizations. SFIG’s recommendations and suggested changes to the rule are laid out in our comment letter from October 2018. If you would like to join SFIG’s Volcker Task Force, please email Jennifer.Wolfe@sfindustry.org
What We're Watching
Senate Banking Committee Hold Hearing for FHFA Director Nominee

The Wall Street Journal Reports that President Trump’s nominee to head the Federal Housing Finance Agency (FHFA), Mark Calabria, testified that he would work to preserve the 30-year fixed rate mortgage. He also stated that he would use his seat on the Financial Stability Oversight Council to raise concerns about systemic risks in the financial system, and that if confirmed, he would work to “carry out the clear intent of Congress, not to impose my own vision.” Mr. Calabria also distanced himself from remarks made by current Acting FHFA Director Joseph Otting, who recently stated that Mr. Calabria had “signed off” on a forthcoming plan from the Treasury Department and the White House to end the conservatorship of Fannie Mae and Freddie Mac, stating he was unaware of the proposal and that he had not been involved in any such plan. 
Multifamily Originations Jump 32 Percent in Q4 2018

According to a report in HousingWire , multifamily originations increased by 32 percent, outpacing even optimistic estimates. For the year, multifamily originations increased 22 percent year-over-year. However, originations for two property types, hotels and office space, fell by 4 percent and 3 percent, respectively. 

Recent volatility in the overnight lending market is raising concerns for SOFR, according to the Wall Street Journal . A spike late last year in part of the market for repurchase agreements has investors and bankers paying close attention to its developments. 

One potential sensitivity will be how the new benchmark acts around the quarter- or year-end. On Monday, December 31, SOFR jumped from 2.46 percent the day before to 3 percent, at the time the highest level since the Federal Reserve began publishing the benchmark last April.

If SOFR proves unusually volatile or hard to predict, it could diminish the benchmark’s appeal to companies that are considering tying their borrowing costs to it, adding uncertainty to the market’s search for a suitable LIBOR alternative, says the Wall Street Journal .
10 Years After the Crisis, Housing Supply Remains Stagnant and Insufficient

A piece published by Bloomberg this week covered a number of reasons why the U.S. single family housing supply remains stagnant and insufficient. These factors include cautious homebuilders and excessive regulation. The situation is further aggravated by low unemployment, resulting in increasing demand, with the lack of supply pushing home prices higher than ever before. The article concludes by noting that people are less willing to move, thus incur new mortgage debt; however with the new dovish approach from the Fed, that might change.  
SFIG Look Ahead
LIBOR Task Force Call
Wednesday, February 20
4:00 p.m. - 5:00 p.m. EDT
GSE Reform Task Force Meeting
Thursday, February 21
2:00 p.m. - 3:00 p.m. EDT 
SFIG Events
SFIG Vegas Countdown: 9 Days Away
Trumponomics  Book Signing with  Stephen Moore
Following the Trumponomics on Trial morning plenary on Tuesday, February 26,  Stephen Moore , SFIG Vegas 2019 Speaker and Distinguished Visiting Fellow, Project for Economic Growth from The Heritage Foundation, will be offering signed copies of his book,  Trumponomics

Be one of the first 100 people to receive a signed copy!
First come, first served.

Tuesday, February 26 | 11:00 - 11:45 a.m. | Pinyon Ballroom 4-5
Access the SFIG Vegas 2019 Attendee Directory and Schedule Meetings
Through the SFIG Vegas 2019 app, you can:

  • See who is coming – use the app to search the 7,000+ attendees
  • Schedule meetings
  • Attend the panels, plenaries, and presentations that matter

Download the app by searching " SFIG Vegas " in the  Apple App Store  or  Google Play .

We would like to extend a special thanks to our app sponsor, AST.