The Fifth Circuit found FHFA’s structure unconstitutional but decided the remedy was to simply toss the structure and leave the net worth sweep standing. The Supreme Court will now grapple with the two issues.

If the FHFA wants to release the GSEs from conservatorship before President Trump leaves office, it will need a big assist from Treasury. And therein lies the problem.

Could investors sink their money into the GSEs only to have Congress convert them into public utilities and closely supervise their g-fees?

Former MBA president David Stevens believes the adverse market fee has nothing to do with COVID-induced risk. “It’s about building up the capital of Fannie and Freddie,” he said.

The trade group reiterated that Fannie and Freddie should not be permitted to exit conservatorship until further systematic, wholesale and long-term reforms are made permanent.

When questioned about the steep fee the GSEs charge to buy early forbear-ance loans, the FHFA director turned the tables on the lawmakers: Why didn’t Congress pay for it in the CARES Act?

The Structured Finance Association said it is concerned FHFA believes that, if the GSEs have capital levels similar to banks, the need for an explicit guarantee will be eliminated.

Nonprofit groups said the new rule will lead to higher guarantee fees, potentially pricing many low-income families and families of color out of the GSE channel.

The panel this week heard testimony that servicers failed to inform borrowers of their right to forbearance, offered less assistance than required by law and provided inaccurate information on lump-sum repayments.

Since the financial crisis, Fannie’s single-family book of business has posted a loss rate of 31.5 basis points. In contrast, residential loans at commercial banks averaged a loss rate of 86 bps, 5.7 times higher.