Almost all of the decline in combined GSE profits was due to a spike in loan-loss provisions. But while Fannie’s provisions continued to grow in the fourth quarter, Freddie’s may have peaked in the third quarter. (Includes data chart.)
Will lower FHA premiums steal market share from the GSEs? According to analysts, private mortgage insurer pricing still makes the GSEs the better execution for borrowers with credit scores over 680. But private MIs are still nervous.
Deciding whether the GSEs should use FICO or VantageScore or both turned out to be the easy part. The hard part is going to be the multiyear process of figuring out how to use the scores together.
In a sign of how much business declined at Fannie and Freddie last year, their contributions to the two affordable housing programs are off 50% from 2022.
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