The Federal Housing Finance Agency (FHFA) is on the defensive again regarding the financial activities of the government-sponsored enterprises (GSEs) – this time, the matter involves a $640,000 bill for Fannie Mae and Freddie Mac's participation at the recent Mortgage Bankers Association (MBA) annual convention.
The Wall Street Journal reports that the GSEs ran up bills that included nearly $342,000 for travel, food, lodging and meeting space rentals at the MBA convention, which was held in October in Chicago. Registration fees for the GSE executives who attended the event totaled $68,000.
In addition, the GSEs spent $74,000 to host four invitation-only dinners for lenders. Fannie Mae and Freddie Mac were also conference sponsors, which involved a $140,000 fee.
The GSEs' spending at the convention was detailed by Rep. Randy Neugebauer, R-Texas, a member of the House Financial Services Committee, who criticized the GSEs for their ‘lavish’ use of taxpayer money.
In a letter to Neugebauer, FHFA Acting Director Edward DeMarco defended the GSEs while acknowledging that the situation should not be repeated.
‘I find that generally there are sound business reasons presented for the various activities and expenditures,’ DeMarco wrote. ‘Still, having completed this review, I intend to further analyze and then direct the companies with regard to two matters – corporate sponsorship of the convention itself and customer dinners. While each of these … are normal corporate activities, in view of the conservatorships, I believe we can and should provide more detailed direction regarding such expenditures in the future.’