GSE reform

More than any real world problem posed by IMBs, it is the government in all of its manifestations that poses a significant risk to the world of mortgage finance and the housing sector more generally, writes the Chairman of Whalen Global Advisors.

The Enterprise Regulatory Capital Framework is going to dramatically transform Fannie Mae and Freddie Mac pricing in ways the industry hasn't begun to contemplate, writes a former senior policy analyst at the FHFA.

Two housing-policy experts whose previous recommendations have been closely followed by the Biden administration are defending the Federal Home Loan Banks, raising the stakes in a debate over whether a major overhaul is needed.

As the GSEs enter their 15th year in conservatorship, shareholders are wondering when they'll get their company back.

Led by Rep. French Hill, the group of conservative lawmakers said the agency must do more to ensure appropriate transparency regarding any new products or activities that the enterprises undertake.

The Federal Housing Finance Agency also noted limits to its authority in efforts to free the government-sponsored enterprises from conservatorship in its report to Congress.

Moving towards bank-like capital standards for all independent mortgage banks that sell loans to Fannie Mae and Freddie Mac could limit consumer access to mortgage credit, writes Community Home Lenders Association executive director Scott Olson.

Also: Sen. Warren and Wells Fargo spar, FHFA suspends Trump-era GSE restrictions and more.

The White House's firing of Federal Housing Finance Agency Director Mark Calabria sparked immediate speculation about who will run the agency and help chart the future of the two mortgage giants. Potential nominees include ex-Obama administration officials, congressional staffers and members of the Biden transition team.

Consumer advocates and mortgage industry officials are urging Sandra Thompson, the new acting director of the Federal Housing Finance Agency, to undo many policies that her predecessor, Mark Calabria, put in place over the past year.

The Supreme Court decision cleared the way for further revisions to the agreements between the Federal Housing Finance Agency and the Treasury, which could include dismissing the January changes.

The now-interim leader of the Federal Housing Finance Agency would give the mortgage industry much-needed stability following Calabria’s calamities, writes the head of Whalen Global Advisors.

The Community Home Lenders Association has called for suspension of federal limits on the loan volumes that Fannie Mae and Freddie Mac can purchase from individual lenders. The demand came on the same day that the Biden administration fired FHFA Director Mark Calabria and started the process of nominating his successor.

Sen. Pat Toomey of Pennsylvania, the Banking Committee's top Republican, is talking up the prospects of a bipartisan deal to overhaul Fannie Mae and Freddie Mac. But Democratic leaders sound less motivated to change the status quo for the government-sponsored enterprises.

The new rules are disproportionate particularly in light of the GSEs’ recent record of profitability, the director of the Community Home Lenders Association writes.

“Federal Housing Finance Authority Director Mark Calabria’s decisions to date are conservative and imply a slow death for the GSEs and IMBs operating in the conventional market,” analyst Chris Whalen writes.

Also: How 9.3 million renters could enter the purchase market, lessons from Flagstar’s data breach and a possible 15-year plan for Fannie and Freddie.

Relying on retained earnings alone, it would be until at least 2036, if not longer, before government control of Fannie Mae and Freddie Mae might end.

The announcement signals an openness to creating something many GOP lawmakers have long resisted: a federal guarantee of the trillions of dollars of mortgage bonds that Fannie and Freddie issue, a rep for P.A. senator said.

If new housing policy initiatives are not adopted by Congress, the Biden Administration may seek to push the GSEs into receivership, which would damage the conventional market, columnist and analyst Chris Whalen says.