Fannie, Freddie pledge eviction freeze as Fed tweaks capital rule
By Pete Schroeder WASHINGTON (Reuters) - Housing giants Fannie Mae and Freddie Mac said on Monday they would freeze mortgage payments on sublet properties provided that landlords agree not to evict their tenants, in another move by regulators to assist borrowers hurt by the coronavirus. Earlier on Monday, the U.S.
By Pete Schroeder
WASHINGTON (Reuters) - Housing giants Fannie Mae and Freddie Mac said on Monday they would freeze mortgage payments on sublet properties provided that landlords agree not to evict their tenants, in another move by regulators to assist borrowers hurt by the coronavirus.
Earlier on Monday, the U.S. Federal Reserve said it was tweaking its rules to make it easier for banks to keep lending by reducing the restrictions they would face when dipping into one of their capital buffers.
Financial regulators have been scrambling this month to ease rules and provide incentives to make it more attractive for banks to continue providing credit to the economy as the coronavirus tips the country into a sharp recession. [nL1N2BC1EX]
The frantic efforts in Washington were evident on Monday when the Treasury Department said at the last minute that a scheduled afternoon meeting of the Financial Stability Oversight Council, a group of financial regulators, had been postponed to later in the week. Treasury Secretary Steven Mnuchin, who chairs that panel, has been intensely engaged in talks to craft an economic relief bill with Congress.
The eviction relief, announced by the Federal Housing Finance Agency that oversees Fannie and Freddie, aims to limit evictions by reassuring landlords that they will not be penalized if their tenants cannot pay the rent.
The relief is available to any multifamily property owners who have a mortgage that is guaranteed by Fannie and Freddie, which accounts for roughly 20% of the multifamily market.
Last week, the FHFA announced a 60-day freeze on foreclosures against single-family mortgages backed by the pair, which guarantee roughly half of the residential mortgage market. Fannie and Freddie do not offer mortgages, but buy them from private parties, package them into securities, and guarantee them for investors.
The Fed change relaxes rules on banks' extra "total loss- absorbing capital" buffer against future losses. The change ensures that restrictions on payouts, such as dividends, are imposed gradually as banks dip further into their buffer, which the Fed said would help ensure banks continue lending.
The new rule clarifies that the restrictions are meant to take place gradually, as opposed to the full restrictions taking effect immediately.
The announcement followed a Sunday night move by the Fed and other banking regulators to clarify that bank examiners will not look harshly on bank efforts to modify loans for borrowers struggling amid the pandemic, so long as they are made in a "safe and sound" manner.
Banks will not be required to categorize such relief as "troubled debt restructurings," which typically require banks to carry more capital to offset the risk.
(Reporting by Pete Schroeder; Editing by Michelle Price and Peter Cooney)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.