Federal Housing Enterprise Regulator

Budget, Performance and Financial Snapshot Fiscal Year 2008

Who We Are

Mission: OFHEO -- To promote housing and a strong national housing finance system by ensuring the safety and soundness of Fannie Mae and Freddie Mac. See page 84 of the following link: www.fhfa.gov/GetFile.aspx?FileID=174

Organization: On July 30, 2008, the Housing and Economic Recovery Act of 2008 (HERA) was signed, creating the FHFA; OFHEO?s Director James B. Lockhart, III was designated the first Director of FHFA. This new agency combines the responsibilities of OFHEO, the FHFB and the HUD GSE Mission Office. Although the new law allows a year to transition employees and consolidate functions, on Oct 27, 2008 all OFHEO and FHFB employees were transferred to the new agency. This report reflects the activities of OFHEO. The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 established OFHEO as an independent entity within HUD. The organizational structure prior to the enactment of HERA consisted of an Office of Supervision, Office of the Gen Counsel, Office of Policy Analysis and Research, Office of External Relations, Office of Budget & Fin. Mgmt, Office of Human Resources Mgmt, Office of Mgmt Planning and the Office of Tech. and Infor. Mgmt. See page 85 www.fhfa.gov/GetFile.aspx?FileID=174

Personnel: At the end of FY2008 OFHEO had a staff of 258 employees and was actively recruiting to fill 13 vacancies. For current vacancies in the Federal Housing Finance Agency please see: www.fhfa.gov/Default.aspx?Page=9

Budgetary Resources: The budgetary resources for OFHEO in FY2008 totaled $66 million dollars. In FY2009 the budget for the newly created FHFA (a non-appropriated agency) is $120.8 million. This represents only .002 percent of the $6.2 trillion of mortgages funded by the Enterprises and the Federal Home Loan Banks (FHLBanks). Fannie Mae?s and Freddie Mac?s component of this FY 2009 budget totals $75.8 million, a 14.8 percent increase from FY2008. This increase reflects the costs associated with FHFA?s new responsibilities as conservator and overseer for mission regulation of the Enterprises. The budget also reflects the Enterprises? share of start-up costs for FHFA?s new infrastructure and a strengthened supervision program for the Enterprises. FHFA is establishing a working capital fund (WCF) of $3 million in FY2009, in line with other federal financial regulators. FHFA?s regulated entities will share in the funding of the WCF.


Budget Snapshot

Total Spending FY 2005-2009
Total Outlays
 Mandatory $0 $0 $0 $0 $0
 Discretionary $64 $60 $66 $66 $76
Total $64 $60 $66 $66 $76
$ in millions
Top 5 Programs By Budget
  Top 5 Programs
 
2008
2009
$ in millions

Performance Snapshot

Accomplishments: Significant enhancements were made in the oversight and supervision of the Enterprises with the issuance of new supervision guidance and revision of the supervision handbook. In April 2008 Annual Report to Congress, OFHEO identified the Enterprises as having ?significant supervisory concerns? citing deteriorating credit conditions in housing as a key factor. In 9/2008, FHFA placed the Enterprises under conservatorship to ensure that they could continue to fulfill their missions. To improve liquidity in the mortgage market, FHFA authorized increases in their portfolios to encourage purchases of their mortgage-backed securities (MBS). Other accomplishments include establishing a GSE Credit Facility, issuing an interim final regulation on golden parachutes to GSE executives and issuing the Mortgage Metrics Report, first in a series of reports that will provide comprehensive data on the Enterprises? borrower assistance efforts including loan modifications available for housing finance.

Challenges: 2008 was the most challenging year in the history of OFHEO and FHFB as the decline in the housing markets not only threatened Fannie Mae and Freddie Mac, but also financial markets worldwide. As we entered FY 2009, nations around the world took unprecedented, coordinated actions to strengthen the capital and liquidity of financial institutions. These actions and HERA?s correction of the flawed regulatory regime for Fannie Mae and Freddie Mac should over time allow FHFA to fulfill its mission. Working together with the Congress and the Administration, we can restore confidence in the Enterprises, and build a stronger and safer future for the mortgage markets, homeowners and renters in America.
Financial Snapshot
Clean Opinion on Financial Statements Yes
Timely Financial Reporting Yes Material Weaknesses 0
Improper Payment Rate None Total Assets $26
Total Liabilities $12 Net Cost of Operations $75
$ in millions
  Footnote:

Summary of Federal Housing Enterprise Regulator Ratings for Fiscal Year 2008

 
                        FY 2008 Performance
Results per Strategic Goal
  Met/Exceeded     Not met but improved over prior years
  Not met target     Data not yet available
Budget per Strategic Goal
($ in millions)
Strategic Goal: Enhance supervision to ensure the Enterprises operate in a safe and sound manner, are adequately capitalized, and comply with legal requirements.
 
Sample chart
          
2008 Actual = $61
Performance Measure(s)* 2006 Results 2007 Results 2008 Target 2008 Results 2009 Target
Percentage of Enterprises with CANELSO rating of 1,2 or 3. N/A N/A 100% 100%   100%
Strategic Goal: Provide support for statutory reforms to strengthen our regulatory powers
 
Sample chart
          
2008 Actual = $2
Performance Measure(s)* 2006 Results 2007 Results 2008 Target 2008 Results 2009 Target
Make recommendations to Congress about legislative changes OFHEO needs to accomplish its mission N/A Achieved At least annually Achieved   At least annually
Strategic Goal: Continue to support the national policy of an efficient secondary mortgage market which promotes homeownership and affordable housing.
 
Sample chart
          
2008 Actual = $3
Performance Measure(s)* 2006 Results 2007 Results 2008 Target 2008 Results 2009 Target
Publish reports to enchance the understanding of mortgages, mortgage marketsand the nation's housing finance system. N/A 8 papers and reports 6 papers and reports 8 papers and reports   8 papers and reports
  * This measure was selected from a number of performance measures aimed at the specific strategic goal