Economy

This year's assessment for Fannie Mae and Freddie Mac is the first to take into account a January agreement between the Federal Housing Finance Agency and the Treasury Department that allowed the companies to retain more earnings.

The guarantor of mortgage-backed securities has been without a Senate-confirmed president for four and a half years. The vacancy makes it difficult for other government agencies to coordinate housing objectives, according to stakeholders.

The company’s $204 million in net income was down from unusual highs seen recently but still historically strong thanks to the balance between its loan channels and servicing operation, representatives said.

Increased purchase lending and added pressure from Fannie Mae and Freddie Mac’s new loan limits should drive the likelihood of borrower misrepresentation.

The gain reinforces other estimates that suggest more work-intensive purchase originations have spurred companies to increase staffing. Hiring addressing changing needs in servicing may come next.

The hot hot real estate market has pulled homeowners out of a debt trap that many had been stuck in since the great financial crisis more than a decade earlier.

While the hot market’s actual and forecast home price gains were key drivers of Fannie’s results, they also present a challenge to the affordable housing mission that it’s working to address.

The industry had tightened up last year in the face of COVID-19. But as the economic outlook improves, banks are now easing criteria amid heightened competition, according to the Federal Reserve’s survey of loan officers.

The proposal should be withdrawn or reworked around the needs of small players they impose a disproportionate burden on, the Community Home Lenders Association said.

Borrowers reacted positively to the increased interaction and engagement resulting forbearances and payoff requests, J.D. Power found.