The Office of Federal Housing Enterprise Oversight (OFHEO) has removed its 2006 consent order with Fannie Mae.
‘This action reflects two years of hard work by Fannie Mae in remediating their problems,’ states James Lockhart, director of OFHEO. ‘OFHEO will continue its ongoing oversight of the Enterprise, including of items that were remediated under the order.’
‘OFHEO continues its OFHEO-directed requirement of a surplus over minimum capital, which was lowered from 30 to 20 percent in the March 19, 2008, agreement with Fannie Mae in return for their commitment to raise significant additional capital,’ Lockhart continues. ‘The company announced such a capital-raising initiative today. As indicated in the agreement, OFHEO intends to further lower the OFHEO-directed requirement to 15 percent upon the successful completion of the fund-raising effort.
‘OFHEO indicated to Fannie Mae its intention to reduce the OFHEO-directed requirement a further five percent in September based upon the company's continued commitment to maintain capital well above OFHEO's regulatory requirement and no material adverse changes to ongoing regulatory compliance,’ he explains. ‘The lowering of the prudential cushion was appropriate in line with the company's progress and with the need to maintain safe and sound operations.’
Source: OFHEO