Both GSEs are expected to need a draw from the U.S. Treasury, thanks to the passage of the Tax Cuts and Jobs Act that will reduce the corporate tax rate and result in $15.3 billion in one-time charges for the pair. With the tax rate being reduced from 35 percent to 21 percent, the GSEs now have to measure their net deferred tax assets using the new rate. According to recent Securities and Exchange Commission filings, Fannie Mae expects to take a one-time charge of $10.0 billion and Freddie Mac is bracing for a $5.3 billion charge.

Some observers think that resolving the long-running conservatorship of Fannie Mae and Freddie Mac this year is closer than it has ever been, but they also say political differences present a number of challenges. There has been an uptick in momentum the past few months and the recent deal between the Federal Housing Finance Agency and the Treasury that allows the GSEs to retain $3 billion in capital is an optimistic sign of progress to many. Moreover, the Senate Committee on Banking, Housing, and Urban Affairs is working on a draft of a GSE reform bill, and the House Financial Services Committee has held a handful of hearings on GSE reform issues in the fourth quarter in preparation for drafting legislation.

Fair housing advocates and civil rights groups wrote the Senate Committee on Banking, Housing and Urban Affairs to express concerns about not having a seat at the table as lawmakers draft GSE reform legislation. The groups, which include the Center for Responsible Lending, National Fair Housing Alliance and the NAACP, said current House and Senate proposals would do significant harm by locking out the very borrowers who depend on a future system, resulting in devastation to a recovering market. “Our constituents have a strong stake in the outcome of any legislative proposals in this area, and we are alarmed that we have not been invited to offer...

Although the GOP tax overhaul will dampen use of the once-sacred mortgage interest deduction by consumers, owners of mortgage companies will be able to keep more of the money they earn each year, according to interviews conducted by Inside Mortgage Trends. In particular, firms that have C-corporation status will benefit the most, thanks to a reduction in the corporate tax rate to 21 percent from 35 percent. S-corps, on the other hand, likely will not do as well because ...

Mortgage and commercial real estate investment trusts stand to benefit from a provision in the Tax Cuts and Jobs Act of 2017 that offers individuals a 20 percent deduction for REIT dividends. Analysts at Keefe, Bruyette & Woods said the deduction applies to “qualified business income,” which includes qualified dividends paid by REITs. The tax reform bill was signed into law on Dec. 22, 2017. Previously, non-capital gains dividends from a REIT were taxed as ...

Fannie Mae and Freddie Mac will bolster their 2018 earnings by a combined $3 billion thanks to GOP tax reform legislation signed into law by President Trump in late December, according to calcula-tions from Keefe, Bruyette & Woods.

Although there appears to be plenty of motivation for reforming Fannie Mae and Freddie Mac in 2018, it remains a herculean legislative effort that will require bipartisan support. Some observers think overhaul of the government-sponsored enterprises this year is closer than it has ever been, while others say political headwinds could make it impossible

The Government Accountability Office, in a new report, urged Congress to specify the economic conditions it believes the FHA mortgage insurance fund can withstand without supplemental funds.

Congressional leaders are working behind closed doors on a stopgap-spending bill that would prevent a government shutdown and keep federal agencies operating past Dec. 22.

The mortgage industry is beginning to get a whiff of what reform of the nation’s housing-finance system might look like next year: a federal gurantee on a new breed of conventional MBS but no backing – at all – of the entities that issue guaranteed securities.