WASHINGTON – Senators Richard Blumenthal (D-CT), Mark Begich (D-AK), Chris Coons (D-DE) and seven Senate colleagues wrote the Acting Director of the Federal Housing Finance Agency today, requesting responses to recent reports that Freddie Mac had strayed from its mission to support home ownership, and had taken financial interests against American homeowners.
Recent reports indicate that Freddie Mac has placed multibillion-dollar bets that pay off if homeowners stay trapped in expensive mortgages with interest rates well above current rates. These bets were reportedly taken while the agency has been slow to assist borrowers in high-interest mortgages with refinancing.
In the letter, the Senators wrote, “If the inability of homeowners to refinance their homes enhances Freddie Mac’s bottom line, this is especially troubling. Freddie Mac exists to support the housing market, and should not have a financial incentive to make it more difficult for struggling homeowners. Such actions by Freddie Mac are contrary to the best interests of American homeowners, sound economic policy, and its mission.”
Additionally, the Senators asked to be provided with lists of any specific transactions, including the dollar amounts and when such investments were made; information for each transaction regarding who at Freddie Mac made the investment decision and the details for how that decision was reached; copies of any policies and procedures for FHFA or Freddie Mac that relate to such investments; and details regarding any actions FHFA has taken or intends to take to ensure that Freddie Mac does not engage in transactions giving rise to such conflicts of interest in the future.
In addition to Senators Blumenthal and Begich, the letter was signed by Sen. Patrick Leahy (D-VT), Sen. Bernard Sanders (I-VT), Sen. Bob Casey (D-PA), Sen. Mark Pryor (D-AR), Sen. Sheldon Whitehouse (D-RI), Sen. Frank Lautenberg (D-NJ), Sen. Al Franken (D-MN), and Sen. Chris Coons (D-DE).