GSE reform

The Supreme Court decision cleared the way for further revisions to the agreements between the Federal Housing Finance Agency and the Treasury, which could include dismissing the January changes.

The Community Home Lenders Association has called for suspension of federal limits on the loan volumes that Fannie Mae and Freddie Mac can purchase from individual lenders. The demand came on the same day that the Biden administration fired FHFA Director Mark Calabria and started the process of nominating his successor.

Sen. Pat Toomey of Pennsylvania, the Banking Committee's top Republican, is talking up the prospects of a bipartisan deal to overhaul Fannie Mae and Freddie Mac. But Democratic leaders sound less motivated to change the status quo for the government-sponsored enterprises.

Relying on retained earnings alone, it would be until at least 2036, if not longer, before government control of Fannie Mae and Freddie Mae might end.

The announcement signals an openness to creating something many GOP lawmakers have long resisted: a federal guarantee of the trillions of dollars of mortgage bonds that Fannie and Freddie issue, a rep for P.A. senator said.

If new housing policy initiatives are not adopted by Congress, the Biden Administration may seek to push the GSEs into receivership, which would damage the conventional market, columnist and analyst Chris Whalen says.

The agency that supervises Fannie Mae and Freddie Mac has pushed for revising an agreement with the Treasury Department allowing the mortgage giants to retain their profits. A deal could be out of reach once Joe Biden takes office.

The agency's request for input will shape how mortgages underwritten by Fannie Mae and Freddie Mac handle appraisals and curb risk.

The proposal builds on guidance the agency gave to Fannie Mae and Freddie Mac earlier this year.

Last year, smaller lenders were put at a slight disadvantage in terms of what they were charged in guarantee fees when they sold loans for cash.