NAHB Steps Up Call for GSE Reform After Syron Remarks
The nation’s home builders reacted swiftly last week to March 12 comments by Freddie Mac CEO Richard Syron indicating to investors and stock analysts in New York that his giant mortgage-funding company was disinclined to to raise more capital to help stabilize the troubled housing market.
Citing management’s fiduciary responsibilities, Syron suggested that Freddie Mac would put the interests of its shareholders first as the housing finance industry weathers the current “crisis,” which he described as a “100-year storm.”
"As a congressionally chartered enterprise, Freddie Mac has two significant and equal responsibilities — that of serving its housing mission and its shareholders. With the housing market in the midst of its worst downturn in decades and millions of Americans facing foreclosure or unable to obtain financing to buy a home, Freddie Mac CEO Richard Syron said yesterday that his chief interest is making money for his shareholders. 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, said Jerry Howard, executive vice president and CEO of NAHB, in a statement issued on March 13.
"This underscores the need for Congress to act now to enact comprehensive reform of the GSEs and strengthen the regulatory oversight over these institutions so that they can return to an aggressive pursuit of their housing mission,” Howard said. “Today's mortgage credit crunch has profound implications not just for housing, but for the overall economy, which, at best, is teetering on the brink of recession.
"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.