FHFA

The Financial Stability Oversight Council said the mortgage giants may need a bigger capital cushion than their regulator has proposed, but stopped short of designating them as “systemically important financial institutions.”

Fannie Mae and Freddie Mac have been slammed for planning an additional refinancing charge to cover COVID-related losses, but the head of the Federal Housing Finance Agency defended the policy in House testimony.

The Federal Housing Finance Agency's proposal could undermine the companies’ mission to support the housing market and penalize consumers in underserved communities, industry and consumer groups say.

Both the Federal Housing Finance Agency and Federal Housing Administration are extending relief for homeowners and renters due to the pandemic crisis.

The mortgage giants were criticized earlier this month for a plan to charge an "adverse market fee" to protect against losses resulting from the pandemic.

If Trump is reelected, his administration would likely move forward with privatizing Fannie Mae and Freddie Mac and relaxing key rules, while a Joe Biden presidency would likely try to expand homeownership access and borrower protections.

The GOP is unlikely to discuss much policy that affects financial services this week during its national convention, though there could be remarks addressing controversial changes to the U.S. Postal Service.

Lenders initially won't be able to pass on the cost of the Federal Housing Finance Agency's "adverse market fee" to borrowers whose rates on GSE-backed mortgages and refinances are already locked in.

The higher charge on mortgages refinanced through Fannie Mae and Freddie Mac is supposed to cushion against a crisis but could contribute to one as the fees are passed on to struggling consumers.

The new “adverse market fee” for refinanced mortgages resembles steps the companies took to combat the 2008 mortgage crisis. But critics charge it isn’t necessary and will hurt borrowers’ ability to tap into low rates.