A recent report from the Congressional Research Service suggests that it may be difficult to simultaneously raise the capital requirements for the GSEs and shrink their footprint, and still expect them to attract equity investors.
Veteran analyst Dick Bove says tapering by the Federal Reserve and meddling by the FHFA will eventually force the Biden administration to address housing-finance reform.
Small lenders believe the GSEs should offer special programs for small servicers and rural appraisals. And like their larger competitors, they don’t like the new PSPAs.
Critics argue that community banks and small credit unions are vulnerable to rules designed for large lenders. Also, if Fannie and Freddie exit conservatorship, many of the guardrails protecting small lenders could vanish.