GSE reform

Consumer advocates and mortgage industry officials are urging Sandra Thompson, the new acting director of the Federal Housing Finance Agency, to undo many policies that her predecessor, Mark Calabria, put in place over the past year.

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.

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

Many have assumed the high court would rule that presidents can fire the Federal Housing Finance Agency director at will. But during oral arguments in a case challenging the agency’s structure, some justices suggested they could stop short of such a decision.

Adolfo Marzol came to the agency after a stint at HUD and a 30-year career in the mortgage industry. He will depart on Dec. 18.

Fannie hasn't completed any credit risk transfers to private investors since the second quarter. Some experts worry the decision — likely spurred by the company’s concerns about a recent capital regulation — could put the mortgage giant on unsteady footing.

The Trump administration has moved forward on a plan to privatize Fannie Mae and Freddie Mac, but Joe Biden appointees could take steps to slow or stop their release from conservatorship.

The new capital framework for Fannie Mae and Freddie Mac is a prelude to letting the mortgage giants potentially retain all their earnings. But efforts to privatize the companies could face pushback from the Biden administration.