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Split power in Congress means lawmakers are unlikely to overhaul how the government backstops more than half the U.S. mortgage market. That provides an opportunity for the Trump administration to take steps on its own — and the industry is lobbying to soften any potential changes, the Wall Street Journal reported. In the short term, congressional inaction is likely good news for the housing market as home sales and prices weaken amid rising interest rates. But the White House is expected to consider steps in the coming months that could reduce the government’s footprint in backstopping the market through mortgage-finance giants Fannie Mae and Freddie Mac, which have been under government control since the 2008 crisis. There are limits on what the administration can do with Fannie Mae and Freddie Mac absent legislation. But their overseer, the Federal Housing Finance Agency, has the authority to raise fees on lenders and adjust the size of loans the companies can buy, among other things. The president is expected to nominate a successor to the agency’s Obama-appointed director in the coming weeks.

UBS Group AG, Switzerland’s largest bank, faces another potentially costly legal battle as the U.S. Department of Justice draws up civil charges over the sale of mortgage-backed securities in the run-up to the 2008 financial crisis, Reuters reported. UBS said yesterday that it expected to be sued by the Justice Department as early as today. The bank said that the claims were not supported by the facts or the law and it would contest any complaint vigorously. Analysts at Zuercher Kantonalbank said that it was unclear how long the U.S. legal case might last and that it was hard to estimate what size fine UBS might face. The analysts said that they thought more than half of the 1.2 billion Swiss francs ($1.20 billion) UBS has set aside for non-core legal risks was dedicated to the U.S. case. UBS said in its statement yesterday that it expected the DOJ to seek unspecified monetary penalties stemming from mortgage securities which date back to 2006 and 2007.

Wells Fargo acknowledged yesterday that, because of a calculation error, it had improperly foreclosed on 545 distressed homeowners after they asked for help with their mortgages, the Washington Post reported. Overall, 870 homeowners were denied help for which they qualified — with more than half losing their homes afterward, Wells Fargo said. The acknowledgment is sure to increase pressure on the San Francisco-based bank, which has been struggling to repair its image after a series of missteps. Wells Fargo said an internal review found the bank had denied help to hundreds of homeowners after fees charged by foreclosure attorneys were improperly used when the bank determined whom to offer mortgage help. The problem began in 2010 and was not corrected until last April, the bank said.

One of the nation’s top bank regulators says the banking system is safe, but worries about risks at non-bank financial institutions, particularly mortgage servicers, YahooFinance.com reported. The remarks from Federal Deposit Insurance Corp. Chair Jelena McWilliams come days after regulators freed the last “too big to fail” non-bank from extra regulation. McWilliams told a banking conference on Tuesday that post-crisis regulatory reform helped make the banking system safer but could have pushed risky activity to non-bank lenders. Those lenders, McWilliams feared, are not regulated by the FDIC or the other two banking regulators: the Federal Reserve and the Office of the Comptroller of the Currency. McWilliams’s comments come as she and the rest of the Financial Stability Oversight Council, a committee of financial regulators, unanimously voted to strip Prudential Financial of its “systemically important financial institution” title. In its report, the council said that the largest life insurer in the U.S. is no longer a risk to financial stability because it has more liquidity that it used to and lacks the exposure to be of concern. “It’s not Prudential that I’m concerned about,” she said. “It’s where are we putting this activity by regulating at the banks at the level that we have regulated it in the past.” McWilliams added that she sees a problem in the fact that eight out of the 10 largest mortgage servicers in the country are non-banks.