Congress af the United States ‘Washington, DE 20515 February 15, 2017 Hon. Met Watt, Director Federal Housing Finance Agency Constitutional Center 400 Seventh Street, SW Washington, DC 20024 Dear Director Watt: ‘As we hope you know, we are long-time supporters and defenders of Fannie Mae and Freddie Mac. Thee agencies have flflld an important mission for many decades in providing every day ‘Americans with access to the 30-year mortgage and have helped countless families get into the middle clas through homeownership. In the aftermath of the 2008 hotsing crisis, we have consistently opposed efforts, and there are ‘many on both the let andthe rigit to dismantle these agencies and turn their portfolios over to a new entity orto the private sector entirely. On the contrary, some of us have taken at times the itary position of arguing thet Fannie Mae and Freddie Mac, having long since paid off thei debt {o the U.S. Treasury, should be permitted to recapitalize and be released from conservatorship. However, Fannie Mae's recent decision to guarantee the debt of “the largest [private] owner of real estate in the world," leaves us questioning the true mission ofthe agency. The process for creating and roling out this new venture was severely flawed with members of Congress and the American publi only learning of it thanks to the intrepid reporting ofthe Wall Street Journal? But more importantly, the arrangement itself is troubling if the govemment {guarantee is now being used to toost the fortunes and market share of the largest private equity Firm in Ameria rather than focused squarely on creating opportunities for Americans locked out of the tight housing market. It no accident that many people today are renting single family hhomes rather than owning them. Some may rent out of choice but far too many have no choice, ‘The lack of transparency surrounding this transaction leaves many questions about whether this is 1 good deal forthe families livingin these properties, forthe communities in which these properties are located, for potential homebuyers, and for local landlords who already face severe bariers to competition. We have no idea if this del results in more affordable rents, bette lease terms for renters, or what other uses could have been made of the precious government guarantee in lew of subsidizing an entity lush with itsown resources and with endless opportunity to access the capital markets for its funding needs "splacstoe is nw the Largest Qwnerof Rel Estate the World” Jonathan Main, Busines Insider, 1452015, 2 lackstone Wing Femie's Backing fer Ret Home Debi” Sure, 1.242017, Ryan December an Nick Timins, Wall SieetMany members of Congress, community groups, and municipalitis have expressed concern and frustration for years with the Non-Performing Loan program through which Fannie Mae and Freddie Mac auction off distressed properties by the thousands at huge discounts mostly to hedge Funds and private equity funds with litle attention paid to the outcomes for homeowners, communities, and the affordable housing missions of their agencies. Instead of refocusing that approach by prioritizing neighborhood stabilization and working with organizations that have a track record of preserving homeownership, Fannie Mae has choser:to double down on its support of a housing market dominated by the shadow banking system, ‘Without being privy to Fannie Mae's plans before they were exposed in the media, supporters of the agency have to wonder if itis going down the same path it dd prior to the housing crisis ~ chasing profits atthe expense of its primary mission. If proven accurate, we are left wondering if the Fannie Mae and Freddie Mac mission continues 10 match our vision for the agencies and ‘America’s middle class. We understand that this deal has not yet been finalized in which ease we ‘would urge its reconsideration. ‘We look forward to your reply. Please donot hesitate to contact us directly to discuss this mater se — ———— pom Mt ay a eee feed, A S ag, on/p ue ieee oree s an econ a ne MEMBER OF CONGRESS. ‘MEMBER OF CONGRESS& | IBER OM CONGRESS Es Lee $ ‘Marcy ‘MEMBER OF CONGRESS MEMBER Gr CONGRESS «cc; Timothy J. Mayopoulos, President and CEO, Fannie Mac. ‘Adam Szubin, Acting Secretary, U.S. Treasury