The administration is sending conflicting signals on whether it has a plan to overhaul the housing finance system, further complicating an already complex debate.
The government-sponsored enterprises are going through a transition period. From proposals for rebuilding their capital cushions to tackling shortages in affordable housing, Fannie Mae and Freddie Mac face a number of key challenges with wide-ranging consequences this year.
Rep. Blaine Luetkemeyer, R-Mo., told the mortgage giants' chief federal regulator that the Financial Accounting Standards Board’s new model for estimating loan losses could pose risk across the mortgage market.
Industry observers will be closely monitoring Mark Calabria's testimony before the Senate Banking Committee on Thursday for hints about how the Trump administration plans to proceed on mortgage finance reform.
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Recent developments give the impression that the administration and lawmakers are in direct competition, but the ultimate framework may rely on coordination from both branches of government.
Absent some policy change, nearly a third of the loans backed by Fannie Mae and Freddie Mac could be in violation of the Consumer Financial Protection Bureau's Qualified Mortgage rule in two years.
As policymakers consider administrative reforms to Fannie and Freddie, they must address the problem of capital arbitrage to avoid overleveraging the mortgage system.
The Trump administration will offer a framework and get Congressional input on housing finance; some online banks offer more than 2% interest on deposits.
