The Fed is allowing its holdings of agency MBS to run off and many other big players in the MBS market appear to be close to tapped out.

Participants in the agency MBS market said if the Trump administration wants to release the GSEs from conservatorship, it should be done in a way that preserves many of the functions currently provided by Fannie Mae and Freddie Mac.

It’s not clear how the Federal Housing Finance Agency’s decision to cut the DEI and ESG programs at the GSEs will impact MBS issuance.

The Trump administration appears unlikely in the near-term to work on ending the conservatorships of the GSEs. And any potential moves will aim to limit disruptions in the mortgage market, according to officials in the administration.

First-quarter earnings reports suggest the reduced size of Fannie Mae’s guarantee book of business may be impacting its market share vis a vis Freddie Mac.

GSE watchers believe that, to appropriately compensate the taxpayer for their government guarantee, Fannie and Freddie would have to pay a commitment fee as high as $46 billion a year.

Housing finance aficionados like the prospect of a GSE exit from conservatorship that includes the retention of the Treasury’s PSPA, especially if done in conjunction with a sovereign wealth fund.

Plaintiffs in Berkley Insurance v. FHFA may finally receive a $612.4 million jury award granted in August 2023.

Three former CEOs of the GSEs this week debated the impact of federal conservatorship, what steps must be taken to safely end the oversight and what the GSEs should look like afterwards.

Some economists believe eliminating all GSE MBS would lower rates on Treasury securities and reduce the government’s borrowing costs.