The Wall Street Journal today reported that the GSEs are being pressured to participate in the Administration’s FHA principal-reduction program.  This has significant impact for big servicers, Fannie and Freddie – not just with regard to heightened losses, as the Journal rightly notes, but also as a precursor to what can happen to the GSEs in the Administration’s January reform proposal. The more the Administration mandates policy-focused action, the more the GSEs look like Ginnie and the harder it is to turn them into something else.

The full report is available to subscription clients.  To find out how you can sign up for the service, click here.

.