Public Officials Affirm Freddie Mac's Vital Role

Senior officials throughout the federal government have recently affirmed that Freddie Mac remains adequately capitalized and vital to the housing finance needs of the conforming and jumbo mortgage markets.

Public Statements on GSEs

"Freddie Mac and Fannie Mae are very important institutions. [Secretary Paulson] assured me that he and Ben Bernanke [the Federal Reserve chairman] will be working this issue very hard."

"Fannie Mae and Freddie Mac play a central role in our housing finance system and must continue to do so in their current form as shareholder-owned companies. Their support for the housing market is particularly important as we work through the current housing correction."

"The Enterprises' $95 billion in total capital, their substantial cash and liquidity portfolios, and their experienced management serve as strong supports for the Enterprises' continued operations."

Other Statements

Administration

"Today our primary focus is supporting Fannie Mae and Freddie Mac in their current form as they carry out their important mission. We appreciate Congress' important efforts to complete legislation that will help promote confidence in these companies. We are maintaining a dialogue with regulators and with the companies. OFHEO will continue to work with the companies as they take the steps necessary to allow them to continue to perform their important public mission."

"Fannie Mae and Freddie Mac are also working through this challenging period. They play an important role in our housing markets today and need to continue to play an important role in the future. Their regulator has made clear that they are adequately capitalized."

"Fannie Mae and Freddie Mac play an important role in our housing finance system, and they should continue to play this role in their current forms as shareholder-owned companies."

"This evening, after working with the companies, the Federal Reserve, and other regulators, Treasury Secretary Paulson outlined a plan that we believe will help add stability during this period.  President Bush directed Secretary Paulson to immediately work with Congress to act on this plan. It is crucial that Congress quickly works to enact this legislation as a complete package along with the strong oversight reform legislation recently passed in the Senate."

Federal Reserve

"The GSEs are playing a critical role at this point, a very big part of the existing mortgage market. I think they could do an even better job if they were better supervised and better capitalized."

OFHEO

"As I have said before, they are adequately capitalized, holding capital well in excess of the OFHEO-directed requirement, which exceeds the statutory minimums.  They have large liquidity portfolios, access to the debt market and over $1.5 trillion in unpledged assets… To support their mission, Freddie Mac is committed to raising an additional $5.5 billion, which they will do given appropriate market conditions.  At a very difficult time in the market, the Enterprises have the flexibility and sound operations needed to support their mission."

"My view is that Fannie and Freddie are adequately capitalized at this point, that they are fulfilling their function, they increased their book by about 10 % this year, they are helping out in the mortgage market and they should continue to do that."

Congress

"Those institutions, Fannie and Freddie, have been responsible for millions of Americans to be able to own their own homes, and they will not fail, we will not allow them to fail. They are vital to Americans' ability to own their own homes. And we will do what's necessary to make sure that they continue that function."

"We have to understand that those two institutions play a critical role in making sure American home owners can buy a home. And I have confidence that with some prudent steps by the government, that we'll be able to stabilize the situation."

"I would hope that people would not react to a sense of panic or whatever and would look at the reality and then we'll be okay."

"Senate Democrats have confidence in Fannie Mae and Freddie Mac and we recognize they are critical to America's homeowners.  We stand ready to work with the Administration and to act quickly and decisively to assist these important agencies as necessary.  We hope to meet soon with senior Administration officials to obtain their views about the best way to address this situation.''

"There's a big difference between IndyMac and Fannie and Freddie. IndyMac engaged in very bad mortgages, luring people into deals they could never afford. That's not the case with Fannie and Freddie. I'm more optimistic about Fannie and Freddie than I am about these banks."

"Fannie Mae and Freddie Mac are too important to go under. Markets should be assured that the federal government will stand by Fannie and Freddie. The companies' regulator has said they are well capitalized; if they need additional support, Congress will act quickly. The Bush administration needs to help pass the housing legislation immediately in order to reassure investors that Fannie and Freddie will have strong oversight going forward.''

Industry Leaders

"Fannie Mae and Freddie Mac play a critical role in the U.S. housing market. We commend both the Treasury Department and the Federal Reserve on this move as it will help ensure that the two companies can continue to play central roles in stabilizing the mortgage markets. This action will ensure that consumers are able to access mortgage credit and it will reassure the capital markets that Freddie and Fannie will continue to play their vital roles providing Americans the opportunity for homeownership and affordable renting housing."

"The bold action taken by Secretary Paulson should have a very positive impact on the mortgage and broader markets. This was an important step toward strengthening investor confidence."

"The fact is that Fannie Mae and Freddie Mac remain a bulwark to the nation’s housing finance system and characterizations in the media during the past week serve only to erode the public’s confidence in the housing finance system at a critical juncture for the economy."

"We believe the proposals outlined by the Fed and Treasury reaffirm the important role of the GSEs and will help to restore the necessary market confidence in these institutions."

"The U.S. economy has a deep stake in the success of Fannie Mae and Freddie Mac as companies with an essential public mission.  As history has shown, both GSEs are vital to the long-term health and success of our nation’s housing finance system."

"Freddie Mac and Fannie Mae play a critical role in the nation’s housing and mortgage industry and the Virginia Foreclosure Prevention Task Force will continue to work with them to support American homeownership."   

"The two GSEs will play a central role in the revitalization of the national mortgage market and will help to preserve options for affordable mortgage loans for prospective and existing homeowners."

"Fannie Mae and Freddie Mac play a vital role in maintaining liquidity in the mortgage market, and temporarily expanding their access to capital is the right policy decision given current conditions."

"Fannie Mae and Freddie Mac play a pivotal role in the housing industry and, with the Federal Reserve’s support, will continue to play a role in stabilizing the market.  Fannie Mae and Freddie Mac help many borrowers achieve the dream of homeownership, and we commend Chairman Bernanke for his leadership."

"The health of the American economy depends on Fannie Mae and Freddie Mac and the steps taken by the U.S. government make clear that the role of Fannie and Freddie, in making fair and affordable mortgage loans available for home owners and home buyers, must not and cannot be interrupted…Fannie and Freddie play a central role in our housing finance system, and we agree that they must continue to do so as we work through the current housing correction."

"GSEs play a critical role in allowing credit unions to obtain the capital necessary to create new mortgages for their member-owners. NAFCU and the credit union community have a vital interest in the preservation of a viable secondary mortgage market. The government's multi-pronged initiative seeks to ensure that Fannie Mae and Freddie Mac are able to continue their important work in support of the housing market during this time of stress. We call on Congress to give this proposal the immediate attention it merits."

"The decisive action taken by Treasury and Federal Reserve was the right thing to do.  Fannie Mae and Freddie Mac play a critical role in the nation's housing and mortgage industry, and this announcement will go a long way in reassuring markets of their continued support for American homeownership."   

"The two mortgage giants are critical to the recovery and viability of the nation's mortgage marketplace. ICBA is confident that today's actions will help restore confidence in the housing sector. As with financial market disruptions in the past, our nation will weather the current market instability and our housing markets will emerge stronger and more resilient.

"Fannie and Freddie have long helped maintain affordable housing for America's working families, in both the single-family market and the multi-family housing finance system, with approximately $5 trillion in mortgages currently being held or guaranteed by these mortgage agencies.

It is important to remember that Fannie and Freddie remain safe and sound. At the same time, this government initiative – and the willingness of Congressional leaders to incorporate the related proposals into the comprehensive housing bill – reaffirms the agencies' essential function in the housing market nationwide."