Industry News

HUD looking at Freddie, Fannie investments

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As Congress debates whether to strip it of much of its role overseeing Fannie Mae and Freddie Mac, the Department of Housing and Urban Development is launching a "comprehensive review and evaluation" of the government-sponsored lenders' investments. Investigations into accounting and management scandals at Freddie Mac and Fannie Mae led the companies to restate earnings by a combined $16 billion and pay more than $500 million in fines. The Office of Federal Housing Enterprise Oversight, which is responsible for verifying that Fannie and Freddie's investments are sound, has overseen those investigations. HUD's review of Freddie and Fannie will determine whether some of the companies' investments are inconsistent with their mandated role, which is to support affordable housing and provide stability to the mortgage market by repurchasing loans from originators. OFHEO Director James Lockhart has said the government-sponsored entities, or GSEs, are invested too heavily in their own mortg...