Magazine article American Banker

HUD Eyeing Fannie's Overseas Consulting for 'Mission Creep'

Magazine article American Banker

HUD Eyeing Fannie's Overseas Consulting for 'Mission Creep'

Article excerpt

The Department of Housing and Urban Development is examining whether Fannie Mae has gone beyond its charter by providing international consulting services, sources familiar with the matter said.

Fannie's International Housing Finance Services group, which has been operating for more than a decade, is just one item that the agency is looking at for so-called "mission creep," the sources said.

The inquiry is part of the Bush administration's strategy of applying consistent pressure on Fannie and Freddie Mac in the hopes that they or their boards or supporters will cut a deal to revamp the regulation of the government-sponsored enterprises.

Other examples of the strategy include tough new affordable-housing goals proposed by HUD and the Treasury Department's consideration of limiting GSE debt issuance.

A HUD spokesman would not discuss its examination of Fannie's overseas activities.

Fannie officials expressed surprise that anyone would question those activities, which began in 1990. They contended that the international group provides valuable services to foreign countries by helping to set up vibrant housing finance systems.

"We have just been sought out by so many entities -- both government and nongovernment -- that it is surprising" to hear criticism, said Soula Proxenos, the managing director of Fannie's international group, which she said has six employees.

"We pride ourselves on the quality of work," she said. "We get huge positive responses from people who have been on our training program or are the beneficiaries of the work that we've done."

Fannie's international activities include offering advice on policy development, securitizations, capital and secondary mortgage markets, various types of financial models, and public and private-sector programs.

Ms. Proxenos said the group estimates it has consulted for 36 countries, including Russia, Mexico, Jordan, and China's special administration region of Hong Kong. …

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