Choice Excerpts from
Written Testimony of Sandra L. Thompson
Director
Federal Housing Finance Agency
Before the U.S. House of Representatives
Committee on Financial Services
“FHFA Oversight: Protecting Homeowners and Taxpayers”
Source: https://docs.house.gov/meetings/BA/BA00/20230523/116003/HHRG-118-BA00-Wstate-ThompsonS-20230523.pdf
Congress established the Federal Housing Finance Agency (FHFA or Agency) to protect the
safety and soundness of the housing finance system and promote affordable and sustainable
access to mortgage credit nationwide through the regulation and supervision of our regulated
entities—Fannie Mae, Freddie Mac (together, the Enterprises), and the Federal Home Loan Bank
System, which includes the 11 Federal Home Loan Banks (FHLBanks) and the Office of
Finance.
As regulator and, in the case of the Enterprises, conservator, FHFA ensures that each of these
steps is undertaken in a manner that furthers the safety and soundness of the regulated entities.
The Enterprises have continued to build capital and now maintain a combined net worth above $100 billion.
More broadly, the safety and soundness of the regulated entities is a key component of all policy
decisions and other actions taken by FHFA.
The updated pricing framework will enable the Enterprises to continue building
capital, thereby reducing the risk to taxpayers who have borne the financial burden of supporting
them since they were placed into conservatorship in 2008.
Much of the updated pricing framework, as discussed below, is calibrated to the ERCF to help ensure that the Enterprises’ capital requirements and pricing framework are more closely aligned.
Risk-based pricing remains in effect, and the upfront fees are now more closely aligned with the
return-on-capital targets set by FHFA.
FHFA has continued to engage with stakeholders on specific issues related to the pricing
framework to ensure it meets our stated objectives of fostering capital accumulation at the
Enterprises, achieving viable returns on capital, and increasing support for creditworthy firsttime homebuyers
Since entering conservatorship in 2008, the Enterprises have remained undercapitalized, and
taxpayers, through the Treasury Department, continue to provide a financial backstop should the
Enterprises confront significant losses. The updated pricing framework will better protect
taxpayers in the long term and put the Enterprises on more durable footing, which will allow
them to support affordable, sustainable mortgage credit across the economic cycle to the benefit
of all Americans. And they will do so with a pricing framework that is more accurately aligned
to the expected financial performance and risks of the loans they back.
