U.S. Takes Over Fannie Mae and Freddie Mac
September 8, 2008
A Compilation of News
U.S. Takes Over Fannie Mae and Freddie Mac: A Compilation of Information
Treasury and Federal Housing Finance Agency Action to Protect Financial Markets and Taxpayers
The Treasury Department and the Federal Housing Finance Agency, with support from the Federal Reserve, announced actions Sunday regarding the housing government sponsored enterprises to protect the financial system, to support the housing market, and to protect the taxpayers.
- Paulson Remarks on Housing GSE Actions
- FHFA Director Lockhart Remarks on Housing GSE Actions
- Fact Sheet: FHFA Conservatorship
- Fact Sheet: Treasury Preferred Stock Purchase Agreement
- Fact Sheet: Treasury MBS Purchase Program
- Fact Sheet: Treasury GSE Credit Facility
_____________________________________________Frank Statement on Congressional Action Regarding GSE Legislation
Washington, DC - House Financial Services Committee Chairman Barney Frank (D-MA) issued the following statement today in response to accusations from a White House spokesperson that Congress has been reluctant to move forward on GSE legislation for many years:
“The truth is when President Bush took office, and the Republicans controlled both houses of Congress, he did not make any progress on comprehensive legislation to reform the regulation of the Government Sponsored Enterprises. It was not until 2005, when the House, on a bipartisan basis, and over the President’s objections finally passed a reform bill. It died in the Senate in part because the White House’s failure to make it a priority.
“In 2006, when the Democrats regained control of Congress, House Democrats made it one of our highest priorities, and passed a bill in May 2007. Finally, a full year later, as the financial crisis worsened, the Senate passed and the President signed GSE reform.
“It is unfortunate that ideologues in the White House who opposed common sense regulation did not join Congress early enough to help prevent the financial firestorm that now threatens the entire economy.”
Dodd Statement On Administration's Plan For Fannie Mae & Freddie Mac
Senator Chris Dodd (D-CT), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, today issued the following statement:
“There are still many unanswered questions about the Administration’s plan, and Americans deserve to know if this unprecedented proposal will help keep mortgages affordable, stabilize the markets, and protect taxpayer interests. Furthermore, we need to understand the circumstances which led the Administration to change course. Just weeks ago, Secretary Paulson testified that he thought he would never use this authority – a message he reiterated until very recently.
“In the coming days, I will invite the architects of this plan to come before the Banking Committee to provide Members of Congress and the public with more information. This Administration has presided over the greatest financial crisis in 70 years. Americans need to know if this plan will alleviate, not deepen, our current economic problems.”
Statement By HUD Secretary Steve Preston On Government Sponsored Enterprises
WASHINGTON ? U.S. Department of Housing and Urban Development Secretary Steve Preston today issued the following statement regarding the Government Sponsored Enterprises, Fannie Mae and Freddie Mac.
"Fannie Mae and Freddie Mac are vital sources of mortgage financing for millions of American families seeking to own or retain a home. Their roles have become even more critical as traditional sources of liquidity have become scarce. We must ensure their safety and soundness and provide stability to our financial markets. The plan announced today is a necessary step to ensure they continue to function effectively.
HUD's Federal Housing Administration and Ginnie Mae have grown dramatically in volume and market presence as borrowers seek safe, affordable sources of new mortgages and refinancing and the market looks to purchase scurities that are safe. We are working to ensure FHA and Ginnie Mae can continue to safely handle increased volumes of mortgage insurance and mortgage?backed securities.
HUD will work closely with the Treasury Department and the Federal Housing Finance Agency to ensure that American families have access to safe, affordable financing for their homes."
Statement by Chairman Bernanke on Fannie Mae and Freddie Mac
The federal banking agencies have been assessing the exposures of banks and thrifts to Fannie Mae and Freddie Mac. The agencies believe that, while many institutions hold common or preferred shares of these two government-sponsored enterprises, a limited number of smaller institutions have holdings that are significant compared to their capital.
The Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision are prepared to work with these institutions to develop capital-restoration plans pursuant to the capital regulations and the prompt corrective action provisions of the Federal Deposit Insurance Corporation Improvement Act.
All institutions are reminded that investments in preferred stock and common stock with readily determinable fair value should be reported as available-for-sale equity security holdings, and that any net unrealized losses on these securities are deducted from regulatory capital.
_____________________________________________U.S. Takes Over Fannie, Freddie Mortgage Companies
Bailout could cost billions, but get ‘major financial threat off the table’
The News Tribune | Sept 8 2008
The Bush administration seized control of the nation’s two largest mortgage finance companies Sunday, seeking to shrink dramatically their outsize influence on Wall Street and on Capitol Hill while at the same time counting on them to pull the nation out of its worst housing crisis in decades. More>>
U.S. Seizes Control Of Mortgage Giants
Takeover of Fannie And Freddie Aims To Revive Housing, Financial Markets
The Washington Post | Sept 8 2008
The government seized control of Fannie Mae and Freddie Mac yesterday in a dramatic bid to restore faith in the embattled mortgage giants and arrest a vicious cycle that has driven the nation's economy into a steep downturn. More »