As the overseer of mortgage giants Fannie Mae and Freddie Mac, the Federal Housing Finance Agency has a duty to safeguard taxpayer dollars. But the regulator may have done just the opposite earlier this month.

On February 11, the FHFA held a conference call to inform a group of mortgage trade associations that it had vetoed a Fannie Mae proposal to buy force-placed insurance directly from underwriters. The news was greeted warmly by those listening in, given that Fannie's plan had threatened to cut mortgage banks from their profitable positions as middlemen.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.