Dear Ms. Sandra L. Thompson:
Acting Director Federal Housing Finance Agency
"U.S. Department of the Treasury (Treasury) and Federal Housing Finance Agency (FHFA) today agreed to suspend certain requirements that were
added on January 14, 2021 to the Preferred Stock Purchase Agreements
(PSPAs) between Treasury and each of
Fannie Mae and Freddie Mac (the Enterprises).
FHFA will continue to measure, manage,
and monitor the financial and operational risks of the Enterprises to ensure that they operate in a safe and sound manner and consistent with the public interest.
During the suspension, FHFA will review
the suspended requirements and consult with
Treasury on any recommended revisions.
These suspensions do not affect the
Enterprises’ ability to
build or retain capital.
The suspension of these PSPA requirements
recognizes that FHFA has the authority and
responsibility for the Enterprises’ safety and soundness
and to foster housing finance markets that
support homeownership and is not intended to
stimulate aggregate housing demand given
current conditions in the
housing market.
Home prices accelerated rapidly in past nineteen months,
with the annual rate of national home price
growth at multi-decade highs.
Markets are more stable than early predictions
of foreclosures during the start of the pandemic.
The U.S. residential housing market today
suffers inadequate housing supply.
To promote housing stability, we need to build more product.
Does keeping the GSE’s on under conservatorship
(since 2008) make sense today?
Could funds be better put into
building low to moderate income housing?
The U.S.
Department of the Treasury (Treasury) provides Fannie Mae and Freddie Mac with
financial support through the Senior Preferred Stock Purchase Agreements
(SPSPAs), which were executed on September 7, 2008, one day after Fannie Mae
and Freddie Mac entered conservatorships (“Original Agreements”).
The SPSPAs were designed to ensure that Fannie Mae and Freddie Mac,
respectively: (i) provide stability to the financial markets; (ii) prevent
disruptions in the availability of mortgage finance; and (iii) protect the
taxpayer.
The GSE’s make quarterly dividend payments to Treasury,
provide Treasury with a Liquidation Preference, and beginning in 2010 pay
Treasury a periodic commitment fee that reflects the market value of the
outstanding Treasury commitment, as well as Stock Warrants for the purchase of
common stock representing 79.9% of the common stock of Fannie Mae and Freddie
Mac, respectively, on a diluted basis.
September
2019 Fannie Mae and Freddie Mac were permitted to maintain capital reserves
of $25 billion and $20 billion, respectively.
What do we want our government to spend our tax dollars on? I
want to see plans to build homes for those families and veterans who are
homeless. I wish for less Federal grants to developers and more local community
small infill housing in all variety of neighborhoods.
Metro Library in Budapest
Saving historic buildings for posterity
