GSEs

Housing policy focused on government guarantees and the 30-year mortgage hasn't done much to help low- and middle-income homeowners build wealth.

More than 1 million homebuyers qualified for a mortgage in the third quarter, the first time since the financial crisis that lenders reached such a threshold, according to research by the Urban Institute.

Fannie Mae and Freddie Mac unveiled an appeals process Tuesday that will allow an independent arbitrator to resolve disputes between lenders and the government-sponsored enterprises over loan repurchase demands.

Lenders argue that the GSEs would be better off buying more loans that are already insured, rather than transferring credit risk after holding them for a time. But Freddie Mac's Kevin Palmer says certainty of reimbursement is more important than the timing of risk transfers.

In the absence of congressional action on housing finance reform, here is what the Federal Housing Finance Agency should do sooner rather than later.

The Federal Housing Finance Agency may face legislation or a lawsuit in the near future as it tries to force captive insurance companies to exit the Federal Home Loan Bank System.

In one corner are groups like the Community Home Lenders Association and the major credit union groups, which are hoping the administration will further cut premiums after a reduction a year ago. In the other are the MBA and the ICBA, which argue a cut now would be too soon.

Financial services issues that helped define a presidency were largely absent from Tuesday's State of the Union address, including the crucial policy items that have not yet been resolved.

Community bankers and credit unions scored a significant victory while others in the mortgage industry lost out in the Federal Housing Finance Agency's final rule establishing membership standards for the Home Loan banks.

The agency scrapped a part of its 2014 proposal that would have required Home Loan bank members to maintain a certain percentage of residential mortgage assets in order to keep their membership. But it held fast on a provision that would disqualify captive insurance firms from membership.