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Tell FHFA Your Thoughts On Fannie & Freddie Affordable Housing Goals



October 15, 2014

Tell FHFA Your Thoughts On Fannie & Freddie Affordable Housing Goals

The Federal Housing Finance Agency is asking for public comment on housing goals for Fannie Mae and Freddie Mac over the next three years. This is a routine "ask" for federal agencies, which are required to solicit public comments for various rulemaking processes and such. It's one of those many functions of government that the general public never really thinks about. But these comment periods are an important way for citizens to make their voices heard. Do bureaucrats read the comments? We certainly hope so, and we would encourage everyone who has a vested interest in Fannie and Freddie to take advantage of this opportunity. The comment period closes Tuesday, October 28.

Check out Mortgage News Daily for a good write-up on this. You can submit your comment via webform here. The agency asks that if you use the web portal that you also email your comment to them at [e-mail] and include in the subject line, "Comments/RIN 2590-AA65."

Your comment doesn't need to be long or complex or contain reams of data. And if you do submit a comment, let us know! We'll reprint comments from Investors Unite members here on the blog so be sure to email your comment to us after you submit it.

We have already submitted our comment. Click here to read the full comment; here's an excerpt:

"Affordable housing, as a matter of policy, is an admirable goal for the federal government. There are countless families and individuals working hard to save up enough for a down payment on a home. But we're concerned about recent proposals that would wind down Fannie and Freddie, because these institutions are an indispensable part of making home ownership affordable. Proposals to eliminate that GSEs would be disruptive to mortgage markets, threaten home ownership, and be at odds with the responsibilities of FHFA as the conservator of these institutions under the HERA statute."

… "The government's conservatorship was not created to be longstanding or permanent. It could have placed them into receivership but did not. HERA, passed by Congress and signed into law by the President, prescribes FHFA's duty to conserve value for shareholders and to nurture the institutions back to profitability. Shareholders have rights under the constitution, and FHFA has responsibilities under the law – and both preclude the Treasury's decision in 2012 to take 100% of profits on an ongoing basis, which permanently undercapitalizes the institutions and does not allow investors any return on their investments.

"With this as context, Investors Unite believes the best way to ensure the availability of affordable housing is to immediately stop the illegal Third Amendment Sweep and allow the GSEs to begin rebuilding their capital base. Eventually a reformed Fannie and Freddie should be released from conservatorship. None of this would prevent the government from making a substantial return on its loans to these institutions: Besides the principal pay-down through excess dividend payments that has already occurred under the sweep, the U.S. owns 80% of the equity through common stock, which some have estimated to be worth more than $200 billion alone. This would be a huge return for the taxpayer, and would actually produce funds that could be placed into an affordable housing trust to help troubled borrowers."