Justice Breyer characterized the net worth sweep as the nationalization of the GSEs. The government and the court-appointed amicus curiae disagreed, describing it as a simple renegotiation of a contract.
Section 4022, which covers forbearance under the CARES Act, does not include an explicit end date. According to the CSBS, this has led many to assume it ends on Dec. 31. The truth is less certain.
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 FHFA has directed the GSEs to extend moratoriums on single-family foreclosures and real estate-owned evictions. The move is likely to cost the two mortgage giants between $1.1 billion and $1.7 billion.
After the 2019 increase, homebuyers with newly eligible loans had an average income twice that of buyers whose loans were still eligible under the 2018 limit.
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.
Though both Fannie and Freddie exceed FHFA’s benchmarks for low-income refis, low-income borrowers actually accounted for a smaller share of the companies’ refis than they did for the market as a whole.
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