If Freddie Mac's credit-risk transfer activities continue to grow, mortgage lenders could eventually see a reduction in the guarantee fees they pay to the government-sponsored enterprise, according to CEO Donald Layton.
Momentum to overhaul the mortgage finance system had been slipping, and with Democrats divided over the Senate's banking relief bill there's virtually no chance more bipartisan deals can be worked out.
The annual progress report on the Fannie Mae and Freddie Mac conservatorships reiterated that a new credit score model will likely not be operational until after the implementation of a new Single Security Initiative.
The Supreme Court dealt hedge funds and other big investors a blow Tuesday by refusing to revive core parts of lawsuits that challenged the federal government’s capture of billions of dollars in profits generated by Fannie Mae and Freddie Mac.
The GSEs are on their way to paying back the money they owed the government under the original bailout deal made at the height of the financial crisis, making 2018 an opportune time for an overhaul of the housing finance market.
Fannie Mae and Freddie Mac will be allowed to build capital buffers to protect against losses under an agreement between the Treasury Department and the Federal Housing Finance Agency announced on Thursday.