The Federal Housing Finance Agency and the Treasury Department today announced the suspension of changes to the preferred stock purchase agreements governing the conservatorships of Fannie Mae and Freddie Mac that were announced in January. FHFA said it will use the suspension to review the requirements and contemplate further revisions, and noted that the suspensions “do not affect the Enterprises’ ability to build or retain capital.”
Among other things, the changes enacted in January placed limits on the GSEs’ ability to acquire loans with higher-risk features which may conflict with ongoing efforts to expand safe and sound affordable housing options. ABA and other industry groups previously raised concerns about the changes, the market disruptions caused by their implementation and the potential they had to hurt lower income and credit challenged borrowers.
“We appreciate today’s decision from the Treasury Department and the Federal Housing Finance Agency to suspend and review the changes to the preferred stock purchase agreements for Fannie Mae and Freddie Mac announced in January,” said ABA President and CEO Rob Nichols. “This step, taken in response to concerns raised by ABA and other stakeholders, will bolster market stability and allow time for FHFA to consider additional revisions to the conservatorships of the two government-sponsored enterprises that can expand affordable housing financing in the country. We look forward to sharing our ideas.”
