NAHB CEO: Freddie Mac “Neglecting Responsibility”

The home builders aren’t happy with Freddie Mac’s “refusal to raise more capital,” as they see it. Earlier this week, concern surfaced among investors and analysts, who suggested that both Fannie Mae and Freddie Mac may need to raise significant additional capital in order to weather the current downturn in the mortgage and housing markets. Freddie Mac has steadfastly maintained that additional capital is not needed beyond the $7 billion it raised last December. “As a congressionally chartered enterprise, Freddie Mac has two significant and equal responsibilities – that of serving its housing mission and its shareholders,” said Jerry Howard, CEO of the National Association of Home Builders, in remarks Thursday. “It is now painfully obvious that the company has strayed light years away from its other vitally important congressionally mandated mission of ensuring an adequate flow of credit for housing and home buyers.” Howard suggested that Freddie Mac was partly to blame for the liquidity problems plaguing the secondary market, and called for passage of a Congressional bill to reform the GSEs. The NAHB, along with the National Association of Realtors, have been actively lobbying for passage of H.R. 1427, the Federal Housing Finance Reform Act of 2007, during the past few weeks. “It is deeply discouraging that a company that should be doing everything within its power to restore liquidity to the marketplace has instead decided to neglect that responsibility,” he said. For more information, visit http://www.nahb.com.