Federal Housing Finance Agency (FHFA) Director Edward DeMarco recently sent a letter to ranking members of the House Financial Services Committee and Senate Banking, Housing and Urban Affairs Committee regarding the federal conservatorship of mortgage finance giants Fannie Mae and Freddie Mac. The letter was sent to Reps. Barney Frank (D-MA) and Spencer Bachus (R-AL) of the House Financial Services Committee, and Sens. Christopher Dodd (D-CT) and Richard Shelby (R-AL) of the Senate Banking, Housing and Urban Affairs Committee. The letter:
- Addresses FHFA’s plans for the GSEs while in conservatorship
- Reviews the establishment and purposes and operation of the conservatorships
- Discusses FHFA’s views on the GSEs’ future business activities, including loan modifications and mitigating credit losses, retained portfolio, new products and affordable housing mission
- Concludes that the conservatorship cannot be a long term solution, and that the only option available under the existing law is to reconstitute the GSEs under their current charters.
