There has been a sort of tug-of-war between various groups who either want to privatize Fannie Mae and Freddie Mac or expand their reach. During the bailout, both received billions in bailout funds and since their rescue has managed to turn their respective operations around and actually makeFannie and Freddie money for the federal government.

One reason they’ve been able to right the ship has been an increase in refinances over the past few years, adding fees to the coffers of Fannie and Freddie.

Edward DeMarco is the outgoing director of the Federal Housing Finance Agency, or FHFA, and has made waves trying to both shore up the credit guidelines for conventional loans while simultaneously increasing the government fees that lenders pay. FHFA is the governing body of both Fannie Mae and Freddie Mac.  Those fee increases have been steady and have recently announced yet another fee increase, this time around 14 basis points. The previous fee increase of 10 basis points occurred in 2012 and will reach 50 basis points after the new increase. That translates into about one-eighth of one percent on a conventional mortgage, or $1,000 on a $200,000 loan.

The successor to DeMarco is Representative Mel Watt, a longtime consumer advocate who is more inclined to make loans more affordable and extending credit and less focus on making money. That may or may not be a good thing but if the current underwriting guidelines are simply extended then both agencies should be on solid footing for quite some time.

Which leads many to think it’s time to privatize them both and keep the taxpayer from ever having to bail out the agencies again. That may not ever be necessary but if they are privatized, interest rates on mortgages will increase merely due to the amount of cash needed for private investors to put on Fannie and Freddie’s shoes and attempt to make up the volume of loans they buy each year. Yet for now, incoming director Watt should keep much of that speculation in check.