The FHLBanks, like Fannie Mae and Freddie Mac, have a public/private structure that can incentivize private profits at public cost. Don Layton, former Freddie CEO, said the banks are ripe for reform.
The approaching expiration of Treasury’s warrants on Fannie and Freddie stock and the possibility of a second Trump administration have revived debate on the potential end of the conservatorship of the GSEs.
Patrick McHenry, R-NC, new chair of the House Financial Services Committee, is viewed as a consensus-maker. But will his politics make it difficult to find common ground with the White House and Senate?
FHA premium cuts are being closely analyzed by HUD while FHFA and Treasury have had no talks about reforming the GSEs through the PSPAs. MBA also pressed FHFA on LLPA changes for conforming jumbos and mortgages for second homes.
The Biden administration and Congress need to address some major risks to the housing-finance system, according to the Government Accountability Office. The administration is still developing plans and there’s little urgency in Congress.
The mortgage industry has resigned itself to no administrative end to the Fannie and Freddie conservatorships. It’s still unclear what happens to the GSEs’ capital requirements.