|HUD No. 06-094
August 10, 2006
HUD LAUNCHES REVIEW OF FANNIE MAE AND FREDDIE MAC INVESTMENTS
Comprehensive Evaluation to be completed by Fall 2007
WASHINGTON - The Department of Housing and Urban Development announced today that it has scheduled separate meetings this week with Fannie Mae and Freddie Mac to launch its comprehensive review and evaluation of their investment activities. As part of the review process, each will be required to compile and submit accounting data as specified by HUD.
Fannie Mae and Freddie Mac, two housing government sponsored enterprises or GSEs, are private corporations with a public mission. HUD is the regulator charged with ensuring that Fannie Mae and Freddie Mac engage in activities that are consistent with their charter authorities.
HUD issued notification letters to each GSE on June 14, 2006, regarding its intention to investigate a range of investments, including partnerships, notes receivable, and equity investments, with a focus on investments that lack transparency on the GSEs' financial statements, such as those classified as "other assets" and "other liabilities." The lack of transparency as it relates to the GSEs' financial dealings is a regulatory concern.
HUD's review and evaluation will determine whether investment activities that were not initiated as part of the GSEs' residential mortgage purchase, guaranty and securitization programs are authorized activities consistent with their charter authorities and public purposes. HUD will also examine the extent to which these investments are subject to the internal investment guidelines approved by each GSE's Board of Directors.
HUD anticipates that its review and evaluation of GSE investment activities will be completed by Fall 2007.
HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and, supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development, and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet and espanol.hud.gov.