Recent Fannie Mae and Freddie Mac activities are “not the kind of day-to-day behavior that you would expect from companies” under federal control, the head of the Federal Housing Finance Agency said.
The regulator of Fannie Mae and Freddie Mac discussed steps the companies have already taken to limit their risk, as well as efforts to prevent housing market “overlap” with the FHA.
At a House hearing covering a whole host of housing finance reform topics, Fannie Mae and Freddie Mac's regulator said "if the circumstances" call for eliminating investors, "we will."
Allowing the mortgage giants to retain profits resolves a short-term capital shortfall, but how much capital they would need after exiting conservatorship is still the bigger question.
The move to alter the government's preferred stock purchase agreements is the first major one under FHFA Director Mark Calabria's tenure to wind down the conservatorship of the government-sponsored enterprises.
Simone Grimes had alleged former FHFA Director Mel Watt made inappropriate advances toward her and she was paid less than the man who had previously held her position.
The shareholders' claims against Fannie Mae and Freddie Mac's regulator mirror arguments in cases challenging the Consumer Financial Protection Bureau.
