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Published: September 2008

Fannie Mae and Freddie Mac should remain focused on their missions

Coalition: Mortgage

In a letter to the Director of the Federal Housing Finance Agency (FHFA), Consumer Action and its coalition members outlined ways to continue and improve the role of Government Sponsored Enterprises (GSEs) in affordable housing.

Below is a summarized excerpt from the letter:

The recent decision to place Freddie Mac and Fannie Mae in conservatorship raises several questions about the role these entities will continue to play in providing affordable homeownership and the role they can play in preventing foreclosures for to low-and moderate-income families. Specifically, we urge you to consider adopting the following policies:

Defer foreclosures and modify loans in the GSEs portfolios

The GSEs should freeze foreclosures for a substantial period of time on all whole loans in their portfolios to allow for modification. Additionally, the GSEs should aggressively remove troubled loans from their securitized pools, without waiting for the loan to become delinquent, and place them in their porlfolios so they can be subsequently modified.

Retain focus on affordable homeownership

Although the government has taken over Freddie Mac and Fannie Mae, it is vital that Congress and the Conservator not lose sight of the GSEs' fundamental purpose, as chartered by Congress, to expand homeownership opportunities and promote access to credit to under-served markets.

Ensure funding for the National Housing Trust Fund (NHTF) and the Capital Magnet Fund (CMF)

These new affordable housing funds, created in the housing legislation enacted in July, provide a dedicated funding source for the production, preservation, rehabilitation, or operation of rental housing targeted to assist low-income households.

Lead Organization

National Fair Housing Alliance

Other Organizations

ACORN | CDFI Coalition | Center for Responsible Lending (CRL) | Consumer Federation of America (CFA) | Consumers Union | Demos: A Network for Ideas & Action | Lawyers' Committee for Civil Rights Under Law | Leadership Conference on Civil Rights (LCCR) | Mexican American LegalDefense & Educational Fund (MALDEF) | National Association of Consumer Advocates (NACA) | National Consumer Law Center (on behalf of its low-income clients) | National Council of La Raza (NCLR) | National Fair Housing Alliance (NFFIA) | National NeighborWorks Association | National Policy and Advocacy Council on Homelessness (NPACH) | National Urban League (NUL) | Opportunity Finance Network | Rainbow Push Coalition

More Information

"Government Sponsored Enterprises – An Introduction" from the Community Investment Network in partnership with the National Community Reinvestment Coalition

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