FHFA recently changed the upfront fees charged by Fannie and Freddie, in part to help meet the highly conservative capital requirements imposed on them by former Director Mark Calabria. Now, critics of the fees have joined critics of the conservatorship.
Former FHFA Acting Director Ed DeMarco and the American Bankers Association have endorsed releasing the GSEs from conservatorship. Industry observers aren’t optimistic about any moves in the near term.
By acing their 2021 stress tests, Fannie Mae and Freddie Mac may have demonstrated they’re no longer a threat to taxpayers, but they’re still years away from having enough capital.
The former FHFA director said, given the Federal Reserve’s commitment to fight inflation, home prices could fall by double digits in percentage terms over the next few years.
Conservative economist Douglas Holtz-Eakin said the Federal Reserve’s exit from the MBS market is helping drive up interest rates in the affordable housing space. The remedy, he said, is GSE reform.
The Federal Housing Finance Agency acting director said there are lots of questions that must be answered before Fannie and Freddie can exit government supervision.