While Congress debates setting up a new entity to regulate the government sponsored mortgage market makers Fannie Mae and Freddie Mac, HUD is stepping in under existing authority to review their financial statements.
To that end, the Department will soon initiate a review of Fannie Mae and Freddie Mac investments and holdings, including certain equity and debt investments, with a focus on transactions classified on their financial statements as ‘other assets/other liabilities.’
HUD’s primary concern is whether the GSEs’ investment activities are consistent with their charter authorities and public purposes and whether each is using the profits it derives as a government-sponsored enterprise for the purposes intended.
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