Industry News

Lockhart says Fannie Mae, Freddie Mac will take years to fix

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It will be "several more years" before Fannie Mae and Freddie Mac fix accounting and management problems, says the federal official in charge of overseeing them, and the government-backed lenders continue to pose "substantial systemic risk" to U.S. banks. In a speech to banking and finance lawyers Wednesday, James B. Lockhart III, director of the Office of Federal Housing Enterprise Oversight, said Fannie Mae and Freddie Mac are making progress in fixing their problems, "but it is slower than they or we would like or expect. It will take several more years. Remedial actions taken to date will help, but legislation is needed to make sure that these two companies do not falter again." Fannie and Freddie, Lockhart said, were allowed to grow too fast and with too little government oversight. "From the beginning, OFHEO has been no match for the responsibility assigned to it of being the safety and soundness regulator of Fannie Mae and Freddie Mac," Lockhart said. "Together, they represent ...