The Financial Service Committee’s Oversight and Investigations Subcommittee met recently to assess the effectiveness of the Federal Housing Finance Agency (FHFA).
Specifically, officials said they were interested in gaining insight with regard to the FHFA’s role as regulator of the housing government sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, and manager of daily business activities through the ongoing conservatorships of Fannie Mae and Freddie Mac.
“Unfortunately, acting as both the regulator and conservator of Fannie and Freddie creates an obvious conflict,” Rep. Ann Wagner (R-MO), said. “FHFA should be shrinking, not expanding its powers, to return to the proper scope of its Congressional mandate. The hearing highlights the need for Congress to build consensus on a more balanced approach to homeownership that relies less on taxpayer subsidies and more on private capital and free market incentives.”
She said since 2008 taxpayers have invested nearly $193.5 billion into Fannie Mae and Freddie Mac.
“Currently, FHFA serves in a unique role: it is both conservator of and regulator for the Enterprises and regulator for the FHLBanks,” Laura Wertheimer, FHFA Inspector General, said. “Its duties as conservator of the Enterprises, which together own or guarantee more than $5 trillion in mortgages, are fundamentally different from its responsibilities as their supervisor. FHFA’s stakeholders, including the Congress, taxpayers, and others, expect FHFA, as conservator, to ensure that both Enterprises are effectively governed and employ sound risk management practices.”