Comment Detail

Comment

I take issue with many items here, first the idea that FHFA should 'manage conservatorships 2018 and beyond', when there is significant data showing that this conservatorship being built on incorrect information in the first place. In the interest of time, here are just a couple of things I'd like changed.

1. On Page 2, B(i) you mention that these entities should be operated with "maintenance of adequate capital". FHFA has not operated these entities with adequate capital for years. At some point, stating it over and over without actually doing it will violate the Integrity value from page 1 that FHFA holds dear.

2. On Page 3 B (v) it discusses operating these entities "consistent with the public interest". While there are many interests and certainly some take precedence over others, the 'public' can be defined as a combination of the many stakeholders here ( many of whom may have opposing interests). Despite those opposing interests, as a base standard, it must be recognized that any action towards any one stakeholder that is illegal, unconstitutional, or requires fraud, lying under oath, theft, or manipulation, is ultimately not in the interest of the greater public good regardless of where on the priority list the impacted stakeholder may be.

3. Page 12 II Performance Goal 3.2 mentions that the purpose and goal of Credit Risk Transfers is to reduce "overall risk exposure". The Credit Risk Transfers as they stand are a façade. They do not reduce true risk, and in fact they increase it. These entities are paying large sums to transfer phantom risk that would never result in actual recoveries even in a 'bad' scenario. This is because of how they're structured, and because of their non-competitive/ forced nature. Because of these things, they violate the long-term goal of "maintenance of adequate capital". Credit risk transfers are not competitive, not efficient, and make it harder for the companies to attain the capital needed to operate in a sound and reasonable manner. These window-dressing transactions do not align with FHFA's 'Excellence' value discussed on page 1.

There are many more items that can be discussed here, but in closing, I'll revisit the FHFA Core Values of integrity. Trying to convince a court that a dividend was going to drain the GSEs when it is known that a dividend can be paid in kind goes against that core value. Using outdated documents to try and convince a court that no one could have ever imagined the GSEs would be profitable (when the documents show that people did know) goes against that core value. Ignoring or manipulating parts of the mandate (Such as trying to replace the word 'or' with 'and' in the following statement from pg. 3 " Congress granted the Director of FHFA the discretionary authority to appoint FHFA as conservator or receiver) goes against that value.

The basis of any strategic plan in this country should be an underlying plan to also follow the laws of the land and respect the rights of those who live in it. Please take a step back and review those things, as well as FHFA's core values, and make sure that any strategic plan aligns with all of those them.

Thank you.