Rep. Royce: Fannie Mae Has Fallen Asleep at the Wheel

Press Release

U.S. Representative Ed Royce (R-Calif.), a senior member of the House Financial Services Committee, released the following statement after the Federal Housing Finance Agency (FHFA) Office of Inspector General (OIG) issued a report on the increased budget for Fannie Mae's office relocation:

"It's paradoxical that an organization overseeing a huge chunk of the mortgage market can't get a simple construction project right. Fannie falling asleep at the wheel in this manner is a perfect representation of the GSEs' model of private gains and public losses. It's time to put aside the conversation about releasing this enterprise and instead refocus on how to wind it down."

In a Management Alert dated June 9, 2016, OIG formally notified the FHFA Director that, as of March 10, 2016, the projected cost to build-out Fannie Mae's new headquarters space to its specifications had risen 53.35% from $164.32/sf to $252.81/sf since January 26, 2015. According to Fannie Mae's proposal, the net present value (cost) of its consolidation and relocation over the term of its lease (15 years) was $770,481,598.

Last November, the President signed legislation by Rep. Royce to cap the salaries of the CEOs of Fannie Mae and Freddie Mac. It was the first major standalone legislation enacted that dealt with the GSEs since they were placed into conservatorship after the financial crisis.

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