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September marked
the eight-year anniversary
of the conservatorship
of Fannie Mae and
Freddie Mac. Amid the
Great Recession and
the subsequent housing crisis, two of the
housing industry's giants found their financial
conditions severely damaged to the point of
being unable to fulfill their mission without
assistance from the government. Since that
intervention, controversy has circled the
entities and little has been done to reform a
conservatorship meant to only be temporary.
IN THE BEGINNING
On September 6, 2008, the Federal
Housing Finance Agency (FHFA) used
its authorities to place Fannie Mae and
Freddie Mac into conservatorship. FHFA
launched initiatives to recover losses resulting
from the housing crisis of 2008 and to
avoid further liability to the GSEs. e
agency sought to decrease the amount of
outstanding repurchases, and they worked to
also decrease the amount of loans originated
with manufacturing defects due to poor
underwriting standards. Finally, FHFA
assumed actions to decrease the amount of
operational loss events at Fannie Mae and
Freddie Mac.
According to FHFA, a key component of
the conservatorship is the commitment of the
I N D U S T R Y I N S I G H T / K E N D A L L B A E R
EIGHT YEARS
AND COUNTING
