This stress test is assuming credit losses about a quarter of the size of the stress test 2 years ago, and much smaller than the last crisis (0.56% vs. 2% vs. 1.4%). Does anybody know if something has structurally improved in the Fannie/Freddie portfolios, or whether the testers are just less pessimistic than they were 2 years ago?
If anything this [1] article would lead the reader to believe since Fannie/Freddie are now spearheading the leading charge their portfolios are further out of line with the market reality.
[1] http://www.fhfa.gov/AboutUs/Reports/ReportDocuments/2016_DFA...
[2] http://www.fhfa.gov/AboutUs/Reports/ReportDocuments/GSEFinPr...
[3] https://online.wsj.com/public/resources/documents/irasohnfin...