WASHINGTON – This morning, the Federal Housing Finance Agency (FHFA) and the U.S. Treasury Department announced an agreement that deprives taxpayers of the compensation they are entitled to under the current conservatorships of Fannie Mae and Freddie Mac – both Government-Sponsored Enterprises (GSEs).
This agreement modifies the prudent practice of the Obama Treasury Department that determines how taxpayers are compensated for the continued risk of their financial backing of the failed GSEs. Under the new proposals, the GSEs will be permitted to reserve $3 billion in capital.
The Majority Whip of the House Financial Services Committee, French Hill (AR-02), issued the following statement:
“I’m very troubled by this morning’s agreement between the FHFA and the Treasury Department. We, the taxpayers, through the Treasury Department, still back GSEs with a line of credit standing at over $250 billion and, while Fannie and Freddie remain in conservatorship, taxpayers continue to be on the hook. If policy makers want to end a decade of negligence and finally reform and modernize our broken and bankrupt secondary mortgage market entities, then I encourage FHFA Director Watt to meet with the House Financial Services Committee Chairman Jeb Hensarling and Senate Banking Committee Chairman Mike Crapo. Together, we can design a successful secondary market that facilitates housing markets and operates in a safe and sound manner for taxpayers.”
