Home Loans Get a Major Update: What's Really Going On?

The housing finance world is buzzing with a significant change. Bill Pulte, the head of housing finance, has given Fannie Mae and Freddie Mac the green light to purchase a lot more mortgage bonds. This move has sparked mixed reactions and raised some eyebrows. The new limit is staggering. Each company can now hold up to $225 billion in mortgage bonds, a huge jump from the previous $40 billion cap. That's an extra $170 billion in bonds if they max out. However, it's unclear whether President Trump or the Treasury Secretary had any input on this decision. This decision is noteworthy because it goes against rules that have been in place for nearly two decades. After the 2008-09 financial crisis, Fannie Mae and Freddie Mac were bailed out and placed under government control. Some people see this new move as a step back to the old ways.Pulte took to social media to call the news "fake. " He clarified that the FHFA is simply giving lenders more flexibility but assured that they wouldn't exceed the $200 billion limit set by the president. After the story broke, the agency confirmed that Fannie and Freddie wouldn't go beyond what the president ordered. Some members of Congress are concerned. They argue that any benefits from these bond purchases will be short-lived if the supply of homes doesn't increase. They believe that lower interest rates will only drive up home prices. Senator Elizabeth Warren, the top Democrat on the Senate's banking committee, thinks this move is just a distraction. She doubts it will significantly lower mortgage rates in the long run and raises questions about the risks to Fannie and Freddie. Pulte's tenure as housing finance chief has been far from quiet. He has used the position to build his political profile and has even initiated federal criminal investigations into some of Trump's critics. He was also behind the administration's decision to investigate Federal Reserve Chair Jerome Powell, which caused a stir among some Republicans in Congress.