Read carefully and this is only a draft.
I am pleased to present the Strategic Plan: Fiscal Years 2013-2017 for the Federal Housing Finance Agency (FHFA). FHFA is an independent regulatory agency, responsible for the oversight of the housing government-sponsored enterprises (GSEs).
The housing GSEs include Fannie Mae, Freddie Mac (known as the Enterprises) and the Federal Home Loan Banks.
The Housing and Economic Recovery Act of 2008 created FHFA by merging the former Office of Federal Housing Enterprise Oversight, the former Federal Housing Finance Board, and the GSE mission office within the Department of Housing and Urban Development. From its first days as a new agency, FHFA faced challenges during a time of significant instability in the financial markets, a severe recession, and a weakened housing sector, including:
FHFA’s mission is to ensure the housing GSEs are safe and sound and that they serve as a reliable source of liquidity and funding for housing finance and community investment. The FHFA Strategic Plan Fiscal Years 2013-2017 sets four strategic goals for FHFA:
1) Safe and sound housing GSEs.
2) Stability, liquidity, and access in housing finance.
3) Preserve and conserve Enterprise assets.
4) Prepare for the future of housing finance in the United States.
To ensure that the housing GSEs are safe and sound, FHFA, as regulator and conservator must anticipate, identify, and respond to risks to the regulated entities, and take timely and appropriate supervisory actions to improve their conditions. FHFA does this through annual on-site examinations of each of the housing GSEs, off-site monitoring, targeted examinations of particular business operations, and focused program reviews, known as horizontal reviews.
FHFA coordinates with other regulators, individually and through its involvement with the Financial Stability Oversight Council, to monitor financial market conditions and stability. Providing prudent alternatives to foreclosures on delinquent mortgages is another part of FHFA’s efforts to promote stability.
Since September 2008, FHFA has been the conservator of Fannie Mae and Freddie Mac with responsibility of overseeing management and governance of the Enterprises. FHFA does not manage day-to-day operations but establishes boundaries and expectations for the Enterprises’ boards and management.
As conservator, FHFA focuses on improving the Enterprises’ operational efficiency and effectiveness, maintaining foreclosure prevention efforts and credit availability for new and refinanced mortgages, reducing the Enterprises’ footprint in current mortgage finance markets, and building infrastructure for future mortgage finance markets. While Fannie Mae and Freddie Mac are in conservatorship, their continued operations depend on capital infusions under an agreement with the U.S. Department of Treasury.
The agreement with Treasury contributes to financial market stability but is not a long-term solution. Such government support for housing is not indefinitely sustainable. However, the form of a successor system of housing finance—one far less dependent on government support—is still uncertain and largely depends on actions that must be taken by the Administration and Congress.
While waiting for important public policy questions ahead to be resolved, FHFA will pursue a series of initiatives and strategies set forward in this plan, which will serve to improve current mortgage processes, inspire greater confidence among prospective market participants, and set the stage for recovery and an improved future system of housing finance. FHFA’s strategic plan builds on the strategic plan for the conservatorships that I sent to Congress on February 21, 2012.
Working with the Congress, the Administration, and FHFA’s stakeholders, I am confident that FHFA will meet the challenge of building the foundation for a safer, more efficient, and effective system of housing finance.
Edward J. DeMarco
Acting Director
Federal Housing Finance Agency
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