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Seeking Alpha: FHFA Is Working With Fannie/Freddie To Help End Conservatorships

Seeking Alpha, April 8, 2022, FHFA Is Working With Fannie/Freddie To Help End Conservatorships

The Federal Housing Finance Agency (FHFA) was created by law in 2008 to oversee and regulate Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC). FHFA immediately placed them into conservatorship and they’ve been there ever since. From 2008-2010, FHFA used its discretionary accounting authority to ensure Fannie and Freddie reported losses and Treasury bought more senior preferred stock. In 2012, when Fannie and Freddie were being forced to reverse all of those discretionary accounting losses, FHFA worked with Treasury to ensure Treasury took everything via the net worth sweep. Fannie and Freddie continued to be bled dry until 2019 when Mark Calabria worked with Steven Mnuchin to change the agreement so that Fannie and Freddie could retain capital. Ever since then, Fannie and Freddie have been on a path out of conservatorship.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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