Comment Detail

Comment

Hello - Supporting affordable housing through contributions to the Housing Trust and Capital Magnet Funds is a wonderful thing and will help to support lower and middle class individuals to realize the American Dream of home ownership. However, to suggest that Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) do so without passing the cost of such allocations through to the originators of loans they purchase or securitize is a poor decision. If these are to be funded by the enterprises, without passing along the cost, they should be adequately capitalized before making such expenditures. Further reductions to their capital, or solely relying on the support that is currently provided by the US Treasury is not sustainable and puts the American Taxpayer at great risk if there is a subsequent recession or downturn in the housing market. Delaying implementation of this statutory prohibition is the responsible path forward. If these funds are needed currently, these costs should be passed on to originators, as the Enterprises do not have the capital to support at this time. Once sufficient capital buffers have been established within the Enterprises, it would be responsible to implement this rule. At that time, this surcharge could be removed for the originators, but funds still paid from core Enterprise activities.

The largest caveat to this entire issue is the third amendment to the PSPA - whereas Treasury is absorbing 100+% of the Enterprise quarterly profits (100% profit plus yearly reductions to retained capital) and not allowing them to either pay down principal on their "loan", nor rebuild capital buffers. As counsel for the FHFA - I would implore you to examine that "deal" so that the retained capital issue can be resolved, and funding provided by the Enterprises for these two worthy causes - without making loans more expensive to originators in the short term.