Hannah Lang

The stock market has reached record highs despite rampant unemployment, recession and a global pandemic. What gives?

The Federal Housing Finance Agency's proposal could undermine the companies’ mission to support the housing market and penalize consumers in underserved communities, industry and consumer groups say.

Both the Federal Housing Finance Agency and Federal Housing Administration are extending relief for homeowners and renters due to the pandemic crisis.

The mortgage giants were criticized earlier this month for a plan to charge an "adverse market fee" to protect against losses resulting from the pandemic.

If Trump is reelected, his administration would likely move forward with privatizing Fannie Mae and Freddie Mac and relaxing key rules, while a Joe Biden presidency would likely try to expand homeownership access and borrower protections.

Dana Wade, a former OMB official, says a strong capital footing will help the Federal Housing Administration weather an uptick in delinquencies and ensure the mortgage market is viable once the economy recovers.

The new “adverse market fee” for refinanced mortgages resembles steps the companies took to combat the 2008 mortgage crisis. But critics charge it isn’t necessary and will hurt borrowers’ ability to tap into low rates.

The mortgage giants will have to meet benchmarks for covering cash flow needs during stressed periods. The FHFA views the requirements as a prerequisite to the companies exiting conservatorship.

The enhanced jobless benefits in the coronavirus relief law enacted in March helped limit delinquencies and maintain consumer spending, analysts say. In their follow-up stimulus plan, Senate Republicans want to cut those benefits from $600 to $200 a week.

Many commercial property owners are locked out of existing coronavirus relief by financing terms that bar them from taking new loans. Under a House bill, they would receive government-backed equity investments.