Fannie Mae and FHFA are expected to stop purchasing LIBOR-linked mortgages. While the government-sponsored enterprises have not been told to stop buying LIBOR ARMs, that day will come, said Freddie Mac director Mark Calabria. Echoing comments from New York Federal Reserve President John Williams at an industry event on 15 July, Calabria said the Freddie Mac was trying to reduce risk and called for increased efforts to educate consumers about the move from LIBOR. He said: “I don’t want to wake up one day and have millions of mortgage borrowers feel like that they were hoodwinked or they were sold something” they did not understand. Outstanding LIBOR-linked ARMs are worth around $1tn or ~6.5% of all outstanding US home loans.
Fannie Mae and Freddie Mac are expected to stop purchasing LIBOR-linked mortgages. While the government-sponsored enterprises have not been told to stop buying LIBOR ARMs, that day will come, said FHFA director Mark Calabria. Echoing comments from New York Federal Reserve President John Williams at an industry event on 15 July, Calabria said the FHFA was trying to reduce risk and called for increased efforts to educate consumers about the move from LIBOR. He said: “I don’t want to wake up one day and have millions of mortgage borrowers feel like that they were hoodwinked or they were sold something” they did not understand. Outstanding LIBOR-linked ARMs are worth around $1tn or ~6.5% of all outstanding US home loans.