The Federal Housing Finance Agency is targeting five states in its plan to adjust the guarantee fees Fannie Mae and Freddie Mac charge for single-family mortgages.  

In those states, through no fault of their own, first time homebuyers with great credit will get punished for current homeowners who are in default.

I liked it more when taxpayers shouldered the risk.

The five states are Connecticut, Florida, Illinois, New Jersey and New York.

Jim Vogel of FTN Financial points out, and I'm extrapolating his words here, that the FHFA shows us two things. First is that the above five states have terrible mortgage credit.

The second is that Congress is clearly incapable of reforming the government-sponsored enterprises, so the FHFA is doing what it can without Congressional approval.

 "An "equal" credit access model designed to guard all states against isolated bad credit outcomes is a restrictive approach that would slow credit creation for however long it takes for the bad states to work through their issues," he said.

"Congress would never develop this approach on its own. It’s simply unthinkable," Vogel added. " Housing reform by executive decision is much different than legislative reform.  If Congress doesn’t engage sooner than it wants to, the ship may sail without it."