Kicking off the year, Fannie Mae and Freddie Mac are the two names at the top of mortgage experts' minds, following stock downgradings and the industry's skeptical views about both firms getting released from government conservatorship in the near future.
Bose George, an analyst at Keefe, Bruyette & Woods, told National Mortgage News that the most feasible way for the two to be free of conservatorship is with the intervention of the U.S. Treasury and its conversion of its senior preferred holdings to common stock in both Fannie Mae and Freddie Mac.
Other top trends in recent weeks include the pace of mortgage license renewals year over year, Washington Federal Bank's parent company exiting the mortgage lending business and more.
Read on to learn about the top industry matters facing mortgage lenders and how the industry is adapting to regulatory changes.
Fannie Mae cuts mortgage forecast as high rates stick around
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For mortgage lenders whose business mantra last year was "survive until 25," Fannie Mae just threw some cold water on those plans.
Its January economic and housing forecast is bearish compared with that of December, forecasting higher mortgage rates and fewer home sales for 2025. That translates to less originations than it previously predicted.
"While we still see signs of resilience in the labor market, the higher mortgage rates that are associated with a growing economy will likely continue the affordability challenges faced by many potential homebuyers," said Mark Palim, Fannie Mae's chief economist, in a press release. "Due to the ongoing lock-in effect and affordability constraints, we currently expect another year of sluggish existing home sales."
FHA says a Trump funding freeze wouldn't jeopardize deals
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With uncertainty swirling around President Trump's controversial funding freeze which was issued and then quickly rescinded, the Federal Housing Administration assured buyers and lenders it would not impact deals currently pending.
On Jan. 27, the Office of Management and Budget imposed a temporary pause on government funding to ensure alignment
In a notice sent the next day, the
Fannie, Freddie release likely. It's just a matter of when
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Although hedge fund manager Bill Ackman's proposed plan to resolve the government-sponsored enterprise conservatorships is seen as unlikely, analysts believe the release of Fannie Mae and Freddie Mac remains a strong possibility.
Rather than forgiveness of the senior preferred shares as
Since Ackman's comments
Fannie Mae and Freddie Mac stock downgraded by KBW
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Fannie Mae and Freddie Mac's common stock are currently overvalued, according to a report from Keefe, Bruyette & Woods. While the likelihood of privatization has risen, significant risks remain for investors at the current valuation for the government-sponsored enterprises.
The investment bank has dropped the ratings for both companies to "underperform," but at the same time it has raised its price targets and earnings estimates.
Both companies' common stock prices soared in the days prior to
Sen. Tim Scott criticizes FHFA actions, eyes housing reform
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Housing finance ranks highly in 119th Congress goals set by Senate Banking Committee Chair Sen. Tim Scott, R.-S.C., who unveiled a comprehensive reform agenda in January.
Scott also issued a letter criticizing the Federal Housing Finance Agency, signaling potential actions he may pursue to reverse policies at Fannie Mae and Freddie Mac.
In a letter to outgoing head of the former Federal Housing Finance Agency Sandra Thompson, Scott criticized her lack of independence from the Biden administration on many initiatives and said she did not do enough to provide transparency and focus on financial soundness regarding
Rumors aside, mortgage license renewals pacing with 2024
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Mortgage loan officers are renewing their origination license for 2025 at a comparable pace to last year, contradicting social media chatter within the home lending community about fewer LOs planning to stay onboard for the year ahead.
As of Jan. 1, 158,152 individuals requested to renew their MLO license, data provided by the Conference of State Bank Supervisors, which oversees the Nationwide Multistate Licensing System, shows.
Regarding state license renewals, there have been 568,786 since the beginning of January, CSBS data reveals.
WaFd is the latest bank to exit mortgage lending
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WaFd Inc., the parent company of Washington Federal Bank, is the latest depository to exit mortgage lending, citing impacts from the business' commoditization and technology, as well as the regulatory burden, in its decision.
The Seattle-based bank, which was a portfolio lender, made the announcement in its 2025 first fiscal-quarter earnings release as well as in a LinkedIn post from Brent Beardall, president and CEO of WaFd.
"Today I/we made the very difficult decision to exit mortgage loan originations after more than 100 years," Beardall said in the Jan. 16 LinkedIn posting. "The impact is real on the approximately 8% of our team that will be released."
Loandepot, Crosscountry Mortgage to settle poaching lawsuits
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Two of the nation's leading mortgage lenders are ready to end their long-running courtroom feuds.
Crosscountry Mortgage and Loandepot have reached confidential settlements in principle in two separate poaching and theft of trade secrets lawsuits, according to court filings in recent days.
The parties are now working on written agreements to end the cases, which included a combined 30 mortgage professionals as defendants and entangled CCM founder and CEO Ronald Leonhardt.
The first Trump 2.0-era Fed meeting's takeaways for mortgage
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Forecasts for policy from January's Federal Open Market Committee's meeting suggested the FOMC would cease cutting short-term rates for the first time since September and indeed it did.
The traditionally independent committee's members were widely anticipated to pause rate cuts they've been
As a result, mortgage experts were expecting the first
FHFA, Treasury amend GSE conservatorship agreements
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In January, the Federal Housing Finance Agency and Treasury made changes to the pacts the U.S. government has with two major government-sponsored enterprises that add certain steps ahead of a release.
The amendments, which follow statements from billionaire and GSE investor Bill Ackman indicating he's confident of plans for
"Today's announcement will reassure stakeholders that the Enterprises' eventual release from conservatorship will follow a methodical process intended to minimize disruption to the housing and financial markets," said [former] FHFA Director Sandra Thompson.
