HUD REQUESTS PUBLIC�S VIEWS ON REGULATION OF FREDDIE MAC AND FANNIE MAE�S NON-MORTGAGE INVESTMENTS

WASHINGTON -- The Department of Housing and Urban Development announced today that it is requesting public comment on possible regulation of non-mortgage investments made by the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae). Freddie Mac and Fannie Mae are Government Sponsored Enterprises (the GSEs).

HUD�s current regulations governing Freddie Mac and Fannie Mae do not contain specific provisions regarding their non-mortgage investments. The Department believes it may be necessary to initiate further rulemaking to ensure that HUD has sufficient tools to accomplish its oversight responsibilities.

Accordingly, HUD is seeking public comment on possible regulations regarding non-mortgage investments by the GSEs. Suggestions may include, but should not be limited to, the need to regulate non-mortgage investments by the GSEs, standards and definitions for such non-mortgage investments, categorical or numerical limits on such investments, and specific requirements for monitoring and reporting to HUD of non-mortgage investments by the GSEs.

An Advance Notice of Proposed Rulemaking, published today in the Federal Register, solicits public comment on this subject prior to the formulation of possible rules or regulations. The public comment period is 90 days from the date of publication. Interested persons are invited to submit comments to the Rules Docket Clerk, Office of the General Counsel, Room 10276, Department of Housing and Urban Development, 451 Seventh Street, SW, Washington DC 20410-0500.

Fannie Mae and Freddie Mac are Congressionally chartered, privately owned corporations. They are responsible for providing stability and liquidity in the secondary market for residential mortgages and have broad authority to make decisions on their investment policies. Under the Federal Housing Enterprise Financial Safety and Soundness Act of 1992, HUD has general regulatory power over the GSEs and the responsibility to ensure that the GSEs fulfill their public purposes.