Transcript: Hearing Q&A with Rep. Robert Pittenger (R-N.C.) & FHFA Director Edward DeMarco on government conservatorship of Fannie Mae & Freddie Mac

Edited by Jenny Jiang

Partial transcript of Q&A with Rep. Robert Pittenger (R-N.C.) and Edward DeMarco, Acting Director of the Federal Housing Finance Agency, on the FHFA’s conservatorship of Fannie Mae and Freddie Mac. The House Committee on Financial Services Hearing was held on March 19, 2013:

Rep. Robert Pittenger (R-N.C.):
…You recently noted that the administration’s failure to provide a detailed plan about how to wind down the GSEs has made it harder to support the housing market and stabilize Fannie and Freddie. Given that the administration has not provided leadership of winding down the GSEs, what steps have you taken as FHFA’s Director to prepare the GSEs for post-conservatorship housing market? Is there more that can be done? Or is the winding down of the GSEs require some guidance from the administration?

Edward DeMarco:
Well, ultimately, bringing the conservatorship to an end, which is the ultimate wind-down, is going to require actually action by the Congress of the United States.

In the meantime, we are taking steps to gradually contract the enterprises’ footprint in the marketplace. We’re raising guarantee fees. We’re now starting to sell single-family mortgage credit risks. We’re shrinking the overall size of the multi-family book. We’re selling assets at an accelerated rate.

I will say about the administration. I mean, I obviously have an important relationship with the administration. They are the senior shareholder – the Treasury Department’s the senior shareholder with Fannie and Freddie. And I consult with them a lot on these things and I believe, I mean, the administration needs to speak to itself with regard to the specifics of what I’ve laid out. But I believe I’ve got a good relationship with the administration in talking through these issues and in indicating to them the direction that I, as conservator and regulator, I believe that’s useful to go, and I benefit from the feedback I get from them.

Rep. Robert Pittenger (R-N.C.):
So you feel you’ve been adequately directed?

Edward DeMarco:
Well, I feel like I have a good working relationship and good consultation, and I know where we agree and where we disagree. What I would say I need most is – to bring these conservatorship to an end, I need both the Congress and the administration to agree on a legislative path that defines the role of the government in the mortgage market going forward so we can know where we are actually building towards as we build for the future.

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