Lockhart leaves Federal Housing Finance Agency


WASHINGTON (AP) – The head of the federal agency that regulates mortgage finance companies Fannie Mae and
Freddie Mac is stepping down.
The timing of James Lockhart’s departure from the Federal Housing Finance Agency is not yet certain and a
successor hasn’t been named.
Lockhart is a longtime friend and Yale fraternity brother of former President George W. Bush. He has been
the director of FHFA and its predecessor, the Office of Federal Housing Enterprise Oversight, for about
three years.
His departure comes amid uncertainty about the administration’s plans for Washington-based Fannie Mae and
sibling company Freddie Mac. Both have been slammed by mounting loan defaults and foreclosures.
Lockhart, 63, urged tighter government restrictions on the two companies, which operated with a far
smaller financial cushion than other institutions. But by the time Congress acted last summer, it was
too late.
Fearing the companies would soon go under, the government seized control of them in September. Since
then, McLean, Va.-based Freddie has tapped nearly $51 billion in government aid to cope with mounting
loan defaults, while Fannie has taken about $34 billion.
The two companies play a vital role in the mortgage market by purchasing loans from lenders and selling
them to investors, or holding them on their own books. Together, the companies own or guarantee almost
31 million home loans worth about $5.4 trillion. That’s about half of all U.S home mortgages.
With foreclosures continuing to surge, Fannie and Freddie’s goals have shifted over the past year. They
are now playing a key role in the administration’s effort to modify or refinance up to 9 million home
Lockhart presented some options for how Fannie and Freddie should operate, but has not given a specific
"The new structures must be designed to reduce risks, rather than magnifying them, as they did in
the past," he said in a speech last week.

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