Freddie Mac and Arch Capital are testing a new form of risk-sharing deal to boost investor appetite for low down payment mortgages. But the pilot is raising concerns about "charter creep" because it dictates private mortgage insurance decisions typically made by lenders.
If GSE reform leads to the 30-year mortgage's demise, homebuyers' monthly payments could soar by $400, according to a recent Zillow estimate. But lenders aren't convinced this housing finance staple is in any danger of being replaced.
Credit unions favor housing finance reforms that would keep the government-sponsored enterprises or something similar in place, but add an explicit government guarantee to their mortgage-backed securities, according to a recent survey.
The Supreme Court dealt hedge funds and other big investors a blow Tuesday by refusing to revive core parts of lawsuits that challenged the federal government’s capture of billions of dollars in profits generated by Fannie Mae and Freddie Mac.
Freddie Mac posted a fourth-quarter net loss of $3.3 billion and will request $312 million from the Treasury after recent tax reform legislation forced it to write down the value of deferred tax assets.