The head of the federal regulator for Fannie Mae and Freddie Mac has stated that the mortgage giants should consider what risk mitigation might be necessary when allowing mortgage borrowers to count their cryptocurrency holdings as an asset, including adjustments for market volatility.
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The head of the federal regulator has suggested the mortgage giants allow borrowers to consider cryptocurrency as an asset without needing to convert their holdings into dollars.
In a post on the social media platform X Wednesday, the Federal Housing Finance Agency Director expressed that cryptocurrency is “an emerging asset class that may offer an opportunity to build wealth outside of the stock and bond markets.”
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financial disclosure for executive branch personnel.
The directive issued Wednesday calls for both Fannie and Freddie “to prepare a proposal for consideration of cryptocurrency as an asset,” but only when the assets are “evidenced and stored on a U.S.-regulated centralized exchange.”
Bill Pulte
Fannie and Freddie must also evaluate what risk mitigation may be required when allowing mortgage borrowers to count crypto holdings as an asset, including “ensuring sufficient risk-based adjustments to the share of reserves comprised of cryptocurrency,” the director noted.
The mortgage giants are required to submit any proposed policy changes regarding crypto treatment to their board of directors for approval before sending them to the FHFA for review.
Commenting on the director’s proposal, Annapolis, Maryland-based mortgage banker John Downs indicated that asset reserves do not significantly impact loan approvals as they once did.
“That prevents the crypto rug from truly impacting the borrower’s ability to repay,” Downs wrote, referring to the volatility of crypto valuations.
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