Little-Known Federal Housing Finance Agency Becomes Political Pawn (ContributorNetwork)

ABC News reports President Barack Obama will announce executive orders to help struggling homeowners refinance their mortgages in an effort to help Americans save money. Obama will use the Federal Housing Finance Agency to bypass Congress in terms of trying to stimulate the economy. His motto to the American people is "We Can't Wait."

What is the Federal Housing Finance Agency ? Here is some background information.

Establishment

Congress authorized the establishment of the Federal Housing Finance Agency in July 2008 as part of the Housing and Economic Recovery Act of 2008. The impetus for its creation was the housing market and foreclosure crisis. Even though companies like Lehman Brothers didn't go bankrupt until September, CNN reported in February 2008 that foreclosures had risen 57 percent the previous month.

The FHFA is an independent agency of the U.S. government. As such, the director of the agency is appointed by the president and has a five-year term. The only authority Congress has is to defund the agency or disband it altogether. The Senate can also suggest candidates for the directorship to the president.

Authority

The Federal Housing Finance Agency has authority over federal mortgage companies Fannie Mae and Freddie Mac. It also oversees the 12 Federal Home Loan Banks and their Office of Finance. Several agencies which were once the purview of the Department of Housing and Urban Development are now under the auspices of the FHFA.

The relatively new agency has regulatory authority over federal mortgage programs. It can support the housing market, increase liquidity and help make housing more affordable for Americans.

The current acting director is Edward DeMarco, appointed Aug. 25, 2009. He has been with the agency in some capacity since it was created. He has a five-year term. DeMarco has been a public servant for decades with the General Accounting Office and the Social Security Administration.

Statistics

As of September 2010, the FHFA regulates $6.7 trillion of debt. That figure includes a purchase or guarantee of 65 percent of new mortgages since the agency was created.

The agency submits annual reports to Congress every June. Federal Home Loan Banks ended the 2010 fiscal year with assets of $878.3 billion, down from $1.02 trillion at the end of 2009. The loan-to-value ratio of mortgages bought by FHFA in 2010 was below 70 percent as the agency attempted to make sure homeowners keep the value of their home after loans are paid in full.

William Browning is a research librarian specializing in U.S. politics. Born in St. Louis, Browning is active in local politics and served as a campaign volunteer for President Barack Obama and Missouri Sen. Claire McCaskill.

Source: http://us.rd.yahoo.com/dailynews/rss/obama/*http%3A//news.yahoo.com/s/ac/20111024/us_ac/10279871_littleknown_federal_housing_finance_agency_becomes_political_pawn

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