To the Editor:
The article Freddie Showed It Can Play Lobbying Game Effectively in the Jan. 25 American Banker reports on certain aspects of the GSEs recent effort to overturn a key provision in HUDs new affordable housing goals rule.
The revision occurred through a rider placed in a government-spending bill in the waning hours of the last Congress.
However, the real loser from this action is not HUD; it is affordable housing. Through its stealth maneuvering, Freddie Mac succeeded in reducing its commitment to service low- and moderate-income families by as much as 40% over the next three years.
This means that the GSE could meet the new goals while financing rental housing for 130,000 fewer lower-income households.
Further, HUDs final housing goals rule was issued upon completion of a 15-month departmental rulemaking process involving extensive public comment and other public input. As part of this process, HUD carefully considered the GSEs position regarding the appropriate weighting for its multifamily activities.
Ultimately, the department decided that the higher adjustment factor Freddie Mac sought was simply not justified by the record. Whereupon the GSE chose to play power politics and circumvent the duly constituted administrative process.
The action is likely to reinforce the view shared by many, both inside and outside of government, that these publicly chartered housing enterprises have far too much influence over public policy.
Allen J. Fishbein
Center for Community Change
Mr. Fishbein worked at HUD from February 1999 to November 2000 as a senior adviser for GSE oversight.