Hensarling Statement on Today's Treasury Announcement regarding Fannie and Freddie

Aug 17, 2012 (Congressional Documents and Publications/ContentWorks via COMTEX) -- House GOP Conference August 17, 2012 Contact: Conference Press Office (202) 226.9000 Hensarling Statement on Today's Treasury Announcement Regarding Fannie and Freddie WASHINGTON - House Republican Conference Chairman Jeb Hensarling (R-Texas) issued the following statement today on the Treasury Department announcement of modifications to the Preferred Stock Purchase Agreements (PSPAs) between the Treasury Department and the Federal Housing Finance Agency (FHFA).

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"I am disappointed that Treasury's first GSE-related action in nearly four years does nothing to actually fix the problem.

"In February 2011, the Obama administration released a report to Congress describing three options for the future of housing finance reform entitled, 'Reforming America's Housing Finance Market.' Unfortunately, the administration has failed to take any action or endorse any of the options outlined in its report since that time, notwithstanding the fact that since its release, Secretary Geithner has stated: * '...we hope to work together with [Congress] to pass comprehensive legislation within the next two years." (March 1, 2011) * 'We are hoping to be in a position relatively soon to engage with Congress more substantively to narrow those range of choices." (March 28, 2012) * 'The biggest source of unfinished business in the financial reform effort is in the housing finance area..." (April 4, 2012) "We've waited all this time for Treasury to weaken taxpayer protections by eliminating dividend payments" If this is the administration's version of GSE reform, I couldn't be more disappointed. It is not the GSEs' dividend payments that are hurting taxpayers - it is the existence of a failed housing model that has exposed taxpayers to trillions of dollars of mortgage risk and forced them to back virtually the entire secondary mortgage market.

"The elimination of the dividend payment is yet another gift to the GSEs - it will relieve them of having to pay taxpayers billions of dollars in dividends on their outstanding draws. The reality is that today's announcement does not leave taxpayers better off. In fact, it actually calls into question whether or not taxpayers will be repaid for the bailout they were forced to provide Fannie and Freddie.

"The administration must work with Congress to create a sustainable mortgage finance system that will not lead to future financial crises and taxpayer-funded bailouts."

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