![]() ![]() Guarantee fees have increased by two and a half times since 2009, and our review last year concluded that overall guarantee fee levels are now appropriate. I also think that most people would attribute a significant part of these improvements to decisions made in conservatorship. Virtually everyone would agree that today we have a much safer and more stable housing finance system than when FHFA placed the Enterprises in conservatorship. Under the provisions of the PSPAs the Enterprises’ dividend payments do not offset the amounts drawn from the Treasury Department. ![]() Since the beginning of conservatorship through the end of 2015, the Enterprises paid approximately $241 billion in dividends to the Treasury Department. Fannie Mae has approximately $118 billion of its PSPA commitment remaining, and Freddie Mac has approximately $141 billion remaining. During the first four years of conservatorship, the Enterprises drew a total of $187.5 billion from Treasury, but neither Enterprise has made a further draw since 2012. Department of the Treasury (Treasury Department) has provided essential financial commitments of taxpayer funding to support the Enterprises’ compromised financial status. Under the Senior Preferred Stock Purchase Agreements (PSPAs), the U.S. Congress established FHFA in 2008 during the height of the financial crisis, and one of the Agency’s first acts was to place the Enterprises into conservatorship. Some background is necessary to frame both parts of the speech. The Unprecedented Conservatorships of Fannie Mae and Freddie Mac ![]() By doing so, I hope these remarks will ignite some dialogue that could well be difficult, but I believe is also critically needed. ![]() While my primary responsibility as conservator may be to manage the Enterprises in the present as I have said on a number of occasions, I believe that I have an obligation, both in my role as conservator and in my role as regulator, to be frank and transparent about our challenges and risks. After two full years as Director of FHFA, however, I think it’s timely for me to talk not only about our accomplishments, but also about some of the challenges and risks we face, some of which will surely become more difficult for us to control the longer the conservatorships continue. The second part of the speech is difficult, both because it looks forward – something I have shown much less inclination to do up to this point in my time as Director of FHFA – and because looking forward is inherently more difficult and almost always tends to generate more controversy. It has been my experience that when decisions produce positive results down the road, we tend to forget how controversial or complicated these decisions might have been at the time they were made. By saying that this part of the speech is easy, however, I want to be careful not to suggest that all the decisions I will highlight were easy or noncontroversial when they were being considered. The first part of my speech is easy because it looks retrospectively at some of the things we have accomplished and how we have managed Fannie Mae and Freddie Mac (the Enterprises) in conservatorship to accomplish them. Both parts reflect a philosophy that I hope all of you agree we have tried to encourage since I became the Director of FHFA – a philosophy of open, honest, and transparent discussion and decision making that helps demystify what FHFA, Fannie Mae, and Freddie Mac do and how those things relate to housing finance stakeholders. This speech has two parts, an easy part and a difficult part. I think all of you will agree that the things I am going to talk about deserve bipartisan attention and collaboration like we have seldom seen in recent years. I also want to thank the Bipartisan Policy Center for extending the invitation for me to speak today on our work at the Federal Housing Finance Agency (FHFA). Thank you, Secretary Cisneros, for your opening remarks and introduction. ![]()
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