Mortgage industry observers increasingly argue that Fannie Mae and Freddie Mac should be regulated as utilities. But conservative critics say, “Not so fast.”

Sen. Pat Toomey, R-PA, the ranking member of the Senate Banking Committee, this week indicated the GOP may be ready to compromise on key issues related to GSE reform.

The Fed and commercial banks purchased a combined $1 trillion in agency MBS over the past 12 months, more than 145% of the net supply. (Includes data chart.)

Because of the terms of the CARES Act, not only are borrowers in forbearance allowed to skip their monthly payments, but servicers are prevented from reporting their mortgages as past due.

Their new Senate majority, albeit a slim one, should make it easier for Democrats to pass key budget priorities. But what does it mean for Fannie and Freddie?

According to Congressional bean counters, increasing g-fees would cut the U.S. deficit a cumulative $30 billion through 2030.

Treasury Secretary Steven Mnuchin suggested in a Senate hearing that Fannie and Freddie may not have enough capital to exit conservatorship before Trump leaves office.

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?