REPORT | FHFA’s Certifications for the Preferred Stock Purchase Agreements w/ Fannie & Freddie

FHFA’s Certifications for the Preferred Stock Purchase Agreements

The FHFA’s Office of Inspector General has issued a report assessing whether the FHFA has fulfilled its Senior Preferred Stock Purchase Agreement (PSPA) commitments. Following the housing crisis in 2008, the Treasury Department invested more than $187 billion in Government-Sponsored Enterprises Fannie and Freddie pursuant to the PSPAs, placing conditions on the FHFA as conservator.

These conditions or “covenants” place a number of requirements on the GSEs and require the FHFA to certify to the Treasury that:

  1. the GSEs have complied with the covenants;
  2. the GSEs’ financial statements and related documents are true and not misleading; and
  3. the funds sought by the GSEs each quarter do not exceed the amount allowed under the PSPAs.

Findings

The OIG found that the FHFA provided only one of the three certifications—the GSEs are seeking no more funds than they are allowed. No certifications were provided on the GSE covenants or financial statements. The OIG did find that the FHFA conducted significant oversight of the GSEs’ financial statements and Securities and Exchange Commission filings, which were independently audited, and that the GSE executive officers certified that there were no material misstatements, but said the FHFA was “silent on the required certifications.”

Full report below…

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FHFA’s Certifications for the Preferred Stock Purchase Agreements w/ Fannie & Freddie

Comments
One Response to “REPORT | FHFA’s Certifications for the Preferred Stock Purchase Agreements w/ Fannie & Freddie”
  1. chitown2020 says:

    The robbery of our wealth continues. $400 billion more U.S. taxpayer dollars is going to be drawn from the Treasury to go into the pockets of these crooks who are insolvent yet, off balance sheet they have innumerable wealth.

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