Mortgage portfolios at Fannie Mae and Freddie Mac increased steadily throughout 2024 before declining during the first quarter of 2025.

Industry reaction was swift — and confused.

"The work on this has picked up significantly in recent weeks," according to Bob Broeksmit, president and CEO of the MBA.

Higher provisions for losses in the second quarter contributed to a 14.6% sequential drop in net income for the mortgage giant.

Lower head counts at the mortgage giant reduced administrative expenses by $145 million in the second quarter, though profits were still down 9% sequentially.

Much of the downturn was in pools with high concentrations of loans that accomplish GSE missions and other social goals.

Loans one payment past due increased 19 basis points during the second quarter, after declining during the first quarter.

Credit scores are a key input in predicting prepayment speeds, which in turn affect valuations and hedge strategies.

Nonbanks handled 60.7% of GSE servicing as of the end of June.

"Your behavior raises significant questions about your judgment and commitment to operating FHFA in a responsible, competent and lawful manner," Sen. Elizabeth Warren, D-MA, wrote to FHFA Director Bill Pulte.