As the term of Federal Housing Finance Agency Mel Watt winds down, the mortgage industry is getting more vocal about perceived shortcomings in the oversight of the government-sponsored enterprises, including the blurring of lines between the primary and secondary markets.
The Federal Housing Finance Agency’s structure was deemed unconstitutional this week by the U.S. Court of Appeals for the Fifth Circuit. And in another rejection for Fannie Mae and Freddie Mac shareholders, the court ruled the Treasury net worth sweep was within the agency’s power.
While the GSEs have been engaging in risk-based pricing for mortgage guarantees since the crisis, very large cross subsidies remain, according to one panelist from the Federal Reserve…
Rick Sharga of Carrington: “Refi volumes will continue to contract, and lenders will have to accelerate their shift towards more purchase business in order to maintain volume.”
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