Fannie Mae, Freddie Mac Ordered To Consider Crypto As an Asset When Buying Mortgages
- Reference: 0178187568
- News link: https://slashdot.org/story/25/06/26/0048249/fannie-mae-freddie-mac-ordered-to-consider-crypto-as-an-asset-when-buying-mortgages
- Source link:
> The head of the federal government agency that oversees Fannie Mae and Freddie Mac wants the mortgage giants to [1]consider accepting a homebuyer's cryptocurrency holdings in their criteria for buying mortgages from banks . William Pulte, director of the Federal Housing Finance Agency, which oversees Fannie and Freddie, ordered the agencies Wednesday to prepare a proposal for consideration of crypto as an asset for reserves when they assess risks in single-family home loans.
>
> Pulte also instructed the agencies that their mortgage risk assessments should not require cryptocurrency assets to be converted to U.S. dollars. And only crypto assets that "can be evidenced and stored on a U.S.-regulated centralized exchange subject to all applicable laws" are to be considered by the agencies in their proposal, Pulte wrote in a written order, effective immediately. Pulte was sworn in as the head of FHFA in March. Public records show that as of January 2025, Pulte's spouse owned between $500,000 and $1 million of bitcoin and a similar amount of Solana's SOL token. [...]
>
> The policy change is meant to encourage banks to expand how they gauge borrowers' creditworthiness, in hopes that more aspiring homebuyers can qualify for a home loan. It also recognizes that cryptocurrencies have grown in popularity as an alternative to traditional investments, such as bonds and stocks. The agencies have to come up with their proposals "as soon as reasonably practical," according to the order.
"This is a big win for advocates of cryptocurrencies who want crypto to be treated the same way as other assets are," said Daryl Fairweather, chief economist at Redfin.
Currently, stock investments are treated as qualifying assets that count toward reserves that banks want borrowers to have. But assets that are more volatile, like individual stocks or crypto, may be discounted by lenders, Fairweather noted. "As long as lenders are appropriately discounting crypto based on volatility, it's fine that crypto investments count toward reserves," she said.
Danielle Hale, chief economist at Realtor.com, added: "If Fannie and Freddie are going to accept cryptocurrency as collateral, that's a strong incentive for banks to shift their practices. Because people who might otherwise have to sell cryptocurrency to qualify -- and maybe that's a deal-breaker for them now -- under this new policy, they can qualify. It sort of expands the potential pool of eligible buyers."
[1] https://apnews.com/article/mortgages-crypto-fannie-mae-freddie-mac-housing-285fad5490a59c3476f7908f444e9fe9
Sums up the housing crisis (Score:5, Interesting)
The real estate industry has inflated so much that they are now incorporating pyramid schemes directly in to the mortgages again. I already had my youth screwed over by the 2008 crisis, now I get see more houses being inflated by people who "bought" pyramid assets. I am a passionate /r/buttcoin reader, and now we have butt-mortgages to laugh about. Remember the genesis block, Bitcoin was intended to mess with the economy all along.
Re:Sums up the housing crisis (Score:5, Interesting)
The housing crisis really has shafted a lot of people, and it seems like it is a permanent problem now. Those huge increases in property values that make people wealthy are not going to be repeated. If you buy a house young somehow, it won't be worth 5x as much, adjusted for inflation, when you retire. That was an offer for boomers only, and some select members of gen X.
Can't easily be undone either, because of course people who already own these expensive assets don't want to see them devalued. Some are still paying the mortgage on them, and could be in negative equity.
Apparently the only solution politicians have is to start another sub-prime mortgage bubble.
Re: (Score:1)
I think you are mostly wrong.
There was major crash in property values after the 2008 crisis. Since that time prices have recovered. There might have been case for a new bubble if when the Fed started pushing rates back up in '17 if prices had really come down. Here we are in '25 though and we have still seen price growth in the face of 7+% rates for some time.
Folks that can scrape the capital together are still buying. Housing demand vs supply remains quite strong, you can see this because in addition t
Re: (Score:2)
> Since that time prices have recovered
Prices tell almost none of the story alone. The people paying those prices are the ones renting them out rather than living in them. It inflates both rent and house prices because there's no other safe place to stuff your cash assets and wealthy people are desperate to get rid of excess cash that will be devalued by inflation.
Re: (Score:2)
> The people paying those prices are the ones renting them out rather than living in them
>> My point exactly! People are leaving the wealth parked in residential real-estate because, the people that want to live in it can't get the capital together to buy in a high rate environment already. The ones who can do, but otherwise the owners are becoming land lords. At the same time there isn't enough 'easy money' available to do higher risk, lower return efforts like putting in whole developments. That come with the cost of doing roads, water, sewer, retention ponds, etc after you manage to acquire the land and get thru often contentious zoning actions.
>> However the moment the FED opens the taps, developers will see strong housing demand and once again see building as safe bet for beating inflation and turning a nice profit. We need prime rates down around a couple %2 over inflation rates for that to happen though. Until then you can just hold existing stock and basically soak the wealth out of the renters.
Re: (Score:3)
Yeah, not only does he not know what a traitor is, but he apparently is unaware that the Obama and Biden administrations were far more successful at limiting immigration than either Trump admin. Largely because Trump is corrupt and only interested in performative attacks on immigrants (hence going after kids here for leukemia treatments and cancelling the visas of people here legally, rather than going after the people who supposedly are taking American jobs by doing the under-the-table work, and their empl
Re: (Score:3)
I don't mean just since 2008, I mean since the 1970s. In the UK the price of an average home went from about 2.5x average salary to about 10-12x average salary, depending on location. So even adjusted for inflation, houses got about 5x more expensive.
Of course if you got on the ladder in the 1970s or earlier you did well out of it. Hugely valuable asset that you can leverage or cash in by downsizing/moving somewhere cheaper when you retire. If you are buying in 2025... Well, by 2075 I doubt that house will
Re: (Score:2)
I appreciate how each side of the political spectrum has their own fairy tale about real estate:
Conservatives: illegal immigrants are buying all the homes!
Progressives: hedge funds are buying all the homes!
Neither is correct and these are just bugbears for politics. The actual answer is we as a nation, states and cities embraced housing restrictions, some bad regulations, bad zoning and general NIMBYism and let bad faith community groups restrict development for decades and now here we are in a simple dema
Re: (Score:2)
To be clear I don't think 'illegal immigrants are buying up all the homes'
I think bringing in people by the millions every month means a long term demographic trend that represents significant population growth, vs not doing so which represents relative population stagnation.
I think population growth equals home price growth over time, we were talking about how boomers saw the value of their real-estate investments appreciate 500% over their lifetimes, on a 30 year scale, immigration policy - drives populat
Re:trump brain rot (Score:2)
> That coupled with Trump having put a stop to importing a small cities worth of illegal immigrants every month will give us a steady not sharp decline in home prices.
. What does either of those things have to do with each other? Do you honestly believe that illegal immigrants are coming here and buying up the housing supply? Or is this more bullshit out of the mouth of a trumper? (Rhetorical).
> if the traitors (also known as Democrats
Now we know you're a liar. The definition of treason is to overthrow a government. Look up jan 6th insurrection.
Re: (Score:2)
Now I know your American hating scumbag tard!
Re: (Score:2)
In terms of serous reply, yes Democrats are traitors here. Look up the Hart-Celler Act.
Democrats absolutely lied to public about the demographic and with them cultural changes that was going to bring about. It got came to pass because Democrats lied to gain power.
Re: (Score:2)
> You fucked yourself because you refuse to actually do some one to buy property.
Wait, what?
Re: (Score:2)
Women's lib dude, its not a just a strategy for girls anymore :-).
Re: (Score:2)
"Rent boy" is an old expression, though one not usually associated with real estate investment advice,
I can see... (Score:5, Insightful)
...the next subprime mortgage crisis on the horizon.
Re: (Score:3)
Only it'll be worse, because the value of the "assets" that have secured all those mortgages they sold the risk on as derivatives will almost certainly go into freefall along with everything else when the bubble pops.
"So, Mr. Jones, you secured your mortgage you're struggling to repay with £1m of... ah, crypto. And what are those holdings worth now? $500k you say? Well, if you'll just vacate the premises and hand over your house keys, I'm sure we can sort all that out to minimise our losses as f
Re: (Score:2)
For me the real scary part is that apartments cost more than mortgages now. So people can't just fall back into a cheap apartment when the bank and the billionaires steal their houses and rent them back.
And the billionaires have shown they're happy to leave those houses empty. The way it works is if you've got three houses and you can rent all three for 1,000 a month or two of them but $2,000 a month you rent two and leave one empty because that's a net $1,000 gain.
Basically our ruling class is arti
Wait until Wall Street (Score:2)
Starts trading in crypto-backed securities like they did with mortgage-backed securities in 2008.
The crash that comes from that is going to make 2008 look like the good days of the .com bubble. There is no end to that crash.
And the best part is when the crash comes people are going to get kicked out of their homes cuz they can't pay their mortgages but apartment rent is going to cost more than the mortgage they were paying on...
We are heading for Mass homelessness. We already have a large popula
Re: (Score:2)
rsilvergun, even you know this wrong. Stop and think for moment. Let's imagine we do the 2k8 thing again, and people start getting foreclosed.
Who does that serve? -Maybe possibly would be real-estate barons looking to snap up property on cheap. Banks certainly don't want to be holding vacant property. Why would they want a bunch of depreciating assets, with high risk of being vandalized and further devalued.
So lets assume various property investment firms snap all them up. You think they can keep rents
My wife (Score:1)
My wife insisted on buying a new house in May. We paid $365 (listed at $350). I gave no idea how much, if anything, it is "overvalued", but two other houses on the same street sold at list price within a couple of weeks of ours. Sadly, we're putting another $75-$100K into it before we even move in, so while we won't be underwater, we will have a lot more into it than we will get out of it any time soon.
Compare that to the house we already had, we owe just under $100K, with a 15 year mortgage at 2.25%. If w
Re: (Score:2)
Fingers crossed rates go down and you can refi. I've actually never paid less than 7 for a mortgage. And I think my first was 13. Those below even 5 I feel was an oddity of covid and 2012-2014 bad monetary policy. Given inflation/gov debt projections, I'd be surprised if they go below 5 any time soon. Of course if they do, prepare for hyper inflation of around 50% per year.
Asset (Score:2)
You keep using that word. I don't think you know what it means.
volatility (Score:4, Funny)
It sounds like they're still allowed to use a multiplier for volatility. So, for each $1 in declared crypto value, the appropriate multiplier for financial stability and aptitude is probably (-1). Then sum with their other assets of more concrete value, like physical Pokemon cards.
Reoccurring income is key (Score:2)
They can consider crypto all they want, but they won't lend you the money without reoccurring income. You can buy a $250,000 house and show the bank that you have $1 million in your savings account and they won't care. That million dollars, like crypto, is liquid. Lenders focus on reoccurring income, job, stability and your ability to keep earning.
Re: (Score:2)
If you have a million in cash, and you want to buy a quarter million dollar asset in a 7.5% prime rate environment. I think you should just use the cash.
7% is a pretty good ROI in the market. Can you beat for a short time sure, but not paying 7% on 250k is a sure thing and therefore the better bet.
Re: (Score:2)
If you have $1M in cash, why wouldn't you buy a $250K house with cash?
Consider (Score:2)
Well, yes. So now they can consider any ownership of coin assets as a negative toward hat person's credit.
but fairs fair - they have to accept (Score:2)
crypro as the bail out funds next crash.
CEXs (Score:2)
The government is forcing people to put their crypto on a centralized exchange. Clearly Coinbase and other exchanges lobbied for this and also the Government wants a way to confiscate your crypto if they don't like you anymore. If they really want to embrace this as an asset, why not use the blockchain to verify ownership? It's literally what it was designed to do.
Making mortgage backed securities even riskier (Score:3)
That seems like the fast path to destabilizing the mortgage backed security market. Crypto valuation can (and frequently has) wildly swing. What may seem like a million dollar asset value could be a $200k or $100k or zero value asset that would be unable to help a creditor if they needed to liquidate assets to cover a loan payment.
I'm all for fixing the GSE situation (stupid to have TWO agencies that do the same work and are both owned by the US Treasury so why pretend there's competition?), but this seems reckless.
Best,
LOL (Score:2)
What about my Rolex collection and my Pokemon cards?
On the surface, the idea of considering crypto an asset for a mortgage sounds stupid. But at the same time, if I've got one or two million in Bitcoin it should count for something when seeing a $500k mortgage. Anyway, shouldn't the property be the collateral or asset in consideration?
Re: (Score:3)
If you have a million or two in Bitcoin, sell $500K of it to buy your house with cash.
Re: (Score:2)
> If you have a million or two in Bitcoin, sell $500K of it to buy your house with cash.
That's definitely one way to do it. But, what if your investment return was higher than your mortgage interest?
Re: (Score:2)
Then you lose out. On the other hand, Bitcoin is a very risky investment, so you could very well win big by cashing out and buying something less risky.
IMO, if you have $1M or $2M invested in a highly volatile asset, cashing out 25% to 50% of it for something with almost no risk is not a bad decision.
Re: (Score:2)
I agree that it's definitely not a bad decision. But, there are those that have a higher risk tolerance than me that would definitely take the mortgage and leave the capital invested. That's probably how they came to have millions in Bitcoin in the first place.
Quite right (Score:2)
Of course they should take cryptocurrency holding into account. I would never consider lending money to someone who had substantial cryptocurrency "assets".
So the government is telling companies how to do b (Score:2)
Again I see. The US slides further into becoming a communist nation. "Walmart must eat the tariffs", now lenders must accept crypto. This really will be a wild 4 years.
Winning! (Score:5, Funny)
> "This is a big win for advocates of cryptocurrencies who ... most of the time, are losers."
Fixed that for you.
Re: (Score:2)
Or frauds! Don't forget fraudsters!