What is the Federal Housing Finance Agency (FHFA)?

Published by Thomas Herold in Laws & Regulations, Real Estate

'Federal Housing Finance Agency (FHFA)' is explained in detail and with examples in the Real Estate edition of the Herold Financial Dictionary, which you can get from Amazon in Ebook or Paperback edition.

The Federal Housing Finance Agency is a government regulating agency. They are independent and responsible for overseeing several agencies within the secondary mortgage market. These include Freddie Mac, Fannie Mae, and the Federal Home Loan Banks. They work to keep these critical government sponsored organizations, along with the entire American housing financial system, in good health.

As such, the FHFA labors constantly to build up and safeguard the secondary mortgage markets in the United States. They do this through their leadership in and delivering excellent research, dependable data, strong supervision, and pertinent policies. The three government sponsored entities of Freddie Mac, Fannie Mae, and the Federal Home Loan Bank system together deliver over $5.5 trillion in financial institutions and mortgage markets funding throughout the United States.

The FHFA helps to keep this all possible by providing their independent regulation and careful oversight of these vital mortgage markets. Besides this, they are also the conservator of both Freddie Mac and Fannie Mae since the financial crisis and Great Recession that began in 2007-2008 wreaked havoc on the two giant government sponsored agencies along with the housing market they guaranteed.

The Federal Housing Finance Agency is concerned with creating a better market of secondary mortgages for the country’s future. To this effect, they are working on a sequence of strategies and initiatives to boost the housing financial system in the future. Among these new ideas is the construction of a new and improved database called the Common Securitization Platform. This will have dual roles. It will take the presently outdated infrastructures and modernize them. It will also allow for the possibilities of other players in the market choosing to utilize this same infrastructure.

The FHFA considers itself to be in a partnership. They strive alongside the entities they regulate to keep home ownership alive and affordable through a variety of programs. These include the HARP Home Affordable Refinance Program and the HAMP Home Affordable Modification Program. The two programs deliver significant and tangible aid to both communities and their homeowners. So far such programs have assisted literally millions of home owning Americans to keep or stay in their houses.

The FHFA does not have a long history. It is a new organization that grew out of the housing market collapse and Great Recession. President Obama signed the Housing and Economic Recovery Act of 2008 to create the Federal Housing Finance Agency back on July 30, 2008.

The ongoing mission of the FHFA is to make certain that the government sponsored enterprises for housing function in a manner that is both economically viable and safe. This is so that they can continue to provide a dependable source of both funds and liquidity for investment in communities and the financing of home purchases. As part of this, they envision a housing financial system that is stable, dependable, and liquid for both the present and the future.

The FHFA values four virtues. They prize excellence in all areas of their work. The organization appreciates respect for their team members, resources, and the information they collect. They value integrity and commit themselves to the greatest possible professional and moral standards. The group also encourages diversity in all of their business dealings and employment arrangements, as well as in the entities which they regulate and for whom they are the conservator.

FHFA is also an important member group of the Financial Stability Oversight Council. Chief among their tasks is to identify financial stability risks in the U.S., to respond to rising threats to the American financial system, and to encourage discipline in the market. They serve on this council with fellow members that include The Federal Reserve governors, CFTC, FDIC, Comptroller of the Currency, SEC, and Treasury Department.

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The term 'Federal Housing Finance Agency (FHFA)' is included in the Real Estate edition of the Herold Financial Dictionary, which you can get from Amazon in Ebook or Paperback edition.