The industry has once again written to Congress requesting that guarantee fees be used only as originally intended: as a critical risk management tool to protect against potential mortgage credit losses.
Asked what levels of capital would be necessary in order to release Fannie and Freddie from conservatorships, Treasury and FHFA said it is “premature” to comment on specific levels.
Just like previous budgets proposed by President Trump, the 2021 version stands little chance of getting passed by Congress. But it does provide a win-dow into the administration’s priorities.
The proposed changes to the Community Reinvestment Act are intended to prevent banks from receiving credit on mortgages to wealthy people living in low-income areas.
FHFA Director Mark Calabria said he would be willing to wipe out Fannie Mae and Freddie Mac shareholders if needed to ensure taxpayers don’t have to bail out the mortgage giants again.
According to analyst Jaret Seiberg, the risks posed by the Supreme Court’s decision explains why FHFA is considering releasing Fannie and Freddie from conservatorship via a consent decree.
Low-downpayment mortgages remain at the core of financing for first-time homebuyers, who continue to move away from FHA and VA programs to-ward conventional home loans.
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