Demands for loan quality aren't just coming from regulators and the government-sponsored enterprises. Secondary market partners and investors don't want to be left holding the bag if loans that lenders create have quality issues.
Fannie Mae's first-quarter profits were enough for it to rebuild its minimum capital buffer and pay the Treasury Department dividend after being forced to take a draw during the previous fiscal period.
If Freddie Mac's credit-risk transfer activities continue to grow, mortgage lenders could eventually see a reduction in the guarantee fees they pay to the government-sponsored enterprise, according to CEO Donald Layton.
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.