File: 
Conservatorship Letter 2 2 10.pdf

Summary

  • February 2, 2010

    Honorable Christopher Dodd
    Chairman
    Committee on Banking, Housing,and Urban Affairs

    The Honorable Barney Frank
    Chairman
    Committee on Financial Services

    Honorable Richard C. Shelby
    Ranking Minority Member
    Committee on Banking, Housing, and Urban Affairs

    Honorable Spencer Bachus
    Ranking Minority Member
    Committee on Financial Services

    Dear Chairmen and Ranking Members:
    I am writing to update you on the conservatorships of Fannie Mae and Freddie Mac (the Enterprises). Recently there has been considerable speculation regarding how the future direction of the Enterprises' business activities interacts with their status in conservatorship. A key motivation for this letter is to provide greater clarity to policymakers and market participants on the Federal Housing Finance Agency's (FHFA) plans for the Enterprises' business activities while they operate in conservatorship.

    The first part of the letter will review the establishment and purposes of the conservatorships, and how the conservatorships are operating. FHFA is focused on conserving the Enterprises' assets and meeting the goals of the conservatorship. The second part of the letter describes FHFA's views on the future direction of the Enterprises' business activities while they are in conservatorship, particularly: loan modifications and mitigating credit losses; retained portfolio; new products; and affordable housing mission.

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